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Resource Accounting in Measures of Unsustainability: Challenging the World Bank's Conclusions

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  • Eric Neumayer

Abstract

The World Bank has recently published acomprehensive study of environmental and resourceaccounting, covering 103 countries (World Bank1997a). The study concludes that many Sub-Saharan,Northern African and Middle East countries have hadnegative `genuine' saving rates over the last 20years and therefore fail to pass the test of weaksustainability. This paper argues that the Bank'sconclusions depend on a method for computing usercosts from resource exploitation that is challengedby two competing ones (the `El Serafy'-method andthe method of Repetto et al.) and is inferior to oneof its rivals. Resource rents are re-computed usingthe `El Serafy'-method for 14 countries and theSub-Saharan and Northern African and Middle Eastregions. The results are that both regions andalmost all countries either stop exhibiting signs ofunsustainability or their unsustainability can beexplained without having recourse to resourceaccounting. However, for Congo, Ecuador, Gabon,Nigeria, Mauritania and Trinidad and Tobago there isa lesson: These countries did not adequately use theopportunities they were given through their naturalresource endowments and should learn from theirmistake for the future depletion of their remainingreserves of natural resources. Copyright Kluwer Academic Publishers 2000

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  • Eric Neumayer, 2000. "Resource Accounting in Measures of Unsustainability: Challenging the World Bank's Conclusions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(3), pages 257-278, March.
    • Handle: RePEc:kap:enreec:v:15:y:2000:i:3:p:257-278
    DOI: 10.1023/A:1008304812545
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    1. Eric Neumayer, 2004. "Arab‐related Bilateral and Multilateral Sources of Development Finance: Issues, Trends, and the Way Forward," The World Economy, Wiley Blackwell, vol. 27(2), pages 281-300, February.
    2. Nourry, Myriam, 2008. "Measuring sustainable development: Some empirical evidence for France from eight alternative indicators," Ecological Economics, Elsevier, vol. 67(3), pages 441-456, October.
    3. McGrath, Luke & Hynes, Stephen & McHale, John, 2019. "Augmenting the World Bank's estimates: Ireland's genuine savings through boom and bust," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    4. Benjamin Leard, 2011. "Joan Martinez-Alier and Ingo Ropke (eds.): Recent developments in ecological economics (2 vols.)," Journal of Bioeconomics, Springer, vol. 13(2), pages 161-178, July.
    5. Dietz, Simon & Neumayer, Eric & De Soysa, Indra, 2007. "Corruption, the resource curse and genuine saving," Environment and Development Economics, Cambridge University Press, vol. 12(1), pages 33-53, February.
    6. Gnègnè, Yacouba, 2009. "Adjusted net saving and welfare change," Ecological Economics, Elsevier, vol. 68(4), pages 1127-1139, February.
    7. Neumayer, Eric, 2004. "Does the "Resource Curse" hold for Growth in Genuine Income as Well?," World Development, Elsevier, vol. 32(10), pages 1627-1640, October.
    8. Dietz, Simon & Neumayer, Eric, 2007. "Weak and strong sustainability in the SEEA: Concepts and measurement," Ecological Economics, Elsevier, vol. 61(4), pages 617-626, March.
    9. Drupp, Moritz A. & Baumgärtner, Stefan & Meyer, Moritz & Quaas, Martin F. & von Wehrden, Henrik, 2020. "Between Ostrom and Nordhaus: The research landscape of sustainability economics," Ecological Economics, Elsevier, vol. 172(C).
    10. Martin Neve & Bertrand Hamaide, 2017. "Environmental Kuznets Curve with Adjusted Net Savings as a Trade-Off Between Environment and Development," Australian Economic Papers, Wiley Blackwell, vol. 56(1), pages 39-58, March.
    11. Sopp Louis Moussi & Leiman Anthony, 2017. "Working Paper 283 - Mineral Resource Accounting Measures in Africa," Working Paper Series 2411, African Development Bank.
    12. Patenema Ouedraogo, 2022. "The Impact Of Public Debt On The Sustainability Of The Economy," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 16(1), pages 334-350.
    13. Indra de Soysa & Eric Neumayer, 2004. "False Prophet, or Genuine Savior? Assessing the Effects of Economic Openness on Sustainable Development, 1980–1999," International Trade 0409001, University Library of Munich, Germany, revised 13 Oct 2004.
    14. Apergis, Nicholas & Ewing, Bradley T. & Payne, James E., 2016. "Oil reserve life and the influence of crude oil prices: An analysis of Texas reserves," Energy Economics, Elsevier, vol. 55(C), pages 266-271.
    15. Ferreira, Susana & Moro, Mirko, 2010. "Constructing Genuine Savings Indicators for Ireland, 1995-2005," Stirling Economics Discussion Papers 2010-10, University of Stirling, Division of Economics.
    16. Karanfil, Fatih & Omgba, Luc Désiré, 2017. "Reconsidering the scarcity factor in the dynamics of oil markets: An empirical investigation of the (mis)measurement of oil reserves," Energy, Elsevier, vol. 137(C), pages 209-218.
    17. Masayuki Sato & Kenta Tanaka & Shunsuke Managi, 2018. "Inclusive wealth, total factor productivity, and sustainability: an empirical analysis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(4), pages 741-757, October.
    18. Neumayer, Eric, 2001. "The human development index and sustainability -- a constructive proposal," Ecological Economics, Elsevier, vol. 39(1), pages 101-114, October.
    19. Neumayer, Eric, 2000. "On the methodology of ISEW, GPI and related measures: some constructive suggestions and some doubt on the 'threshold' hypothesis," Ecological Economics, Elsevier, vol. 34(3), pages 347-361, September.
    20. Samakovlis, Eva, 2008. "How are Green National Accounts Produced in Practice?," Working Papers 105, National Institute of Economic Research.
    21. Pillarisetti, J.Ram, 2005. "The World Bank's 'genuine savings' measure and sustainability," Ecological Economics, Elsevier, vol. 55(4), pages 599-609, December.

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