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The Case for Direct Transfers of Resource Revenues in Africa - Working Paper 333

Author

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  • Shantayanan Devarajan
  • Marcelo Giugale

Abstract

Noting that Africa’s resource-rich countries have not translated their wealth into sustained economic growth and poverty reduction, this paper shows that by transferring a portion of resource-related government revenues uniformly and universally as direct payments to the population, some countries could increase both private consumption and the provision of public goods, and thereby reduce poverty and enhance social welfare. We make the case based on theoretical considerations and explore how these direct dividend payments would look in practice in a group of selected African countries.

Suggested Citation

  • Shantayanan Devarajan & Marcelo Giugale, 2013. "The Case for Direct Transfers of Resource Revenues in Africa - Working Paper 333," Working Papers 333, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:333
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    File URL: https://www.cgdev.org/publication/case-direct-transfers-resource-revenues-africa-working-paper-333
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    References listed on IDEAS

    as
    1. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.
    2. Shantayanan Devarajan, Hélène Ehrhart, Tuan Minh Le, Gaël Raballan, 2011. "Direct Redistribution, Taxation, and Accountability in Oil-Rich Economies- A Proposal- Working Paper 281," Working Papers 281, Center for Global Development.
    3. Mr. Alan H. Gelb & Mr. Arnaud Dupuy & Mr. Rabah Arezki, 2012. "Resource Windfalls, Optimal Public Investment and Redistribution: The Role of Total Factor Productivity and Administrative Capacity," IMF Working Papers 2012/200, International Monetary Fund.
    4. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014, December.
    5. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Giorgio Brosio & Raju Jan Singh, 2014. "Revenue Sharing of Natural Resources in Africa : Reflections from a Review of International Practices," World Bank Publications - Reports 20062, The World Bank Group.
    2. Carlos Chavez & Mr. Gonzalo Salinas & Yuri Zamora, 2022. "Closing Peru's Ethnic Gaps Amidst Sustained Economic Growth," IMF Working Papers 2022/180, International Monetary Fund.
    3. Behzadan, Nazanin & Chisik, Richard & Onder, Harun & Battaile, Bill, 2017. "Does inequality drive the Dutch disease? Theory and evidence," Journal of International Economics, Elsevier, vol. 106(C), pages 104-118.
    4. Richard Chisik & Bill Battaile & Harun Onder, 2014. "The Distribution of Natural Resource Rents and the Dutch Disease," Working Papers 042, Ryerson University, Department of Economics.
    5. Richard Chisik & Bill Battaile & Harun Onder, 2014. "Services, Inequality, and the Dutch Disease," Working Papers 041, Ryerson University, Department of Economics.
    6. Bhorat, Haroon & Chelwa, Grieve & Naidoo, Karmen & Stanwix, Benjamin, 2017. "Income Inequality Trends in sub-Saharan Africa: Divergence, determinants and consequences: Resource Dependence and Inequality in Africa: Impacts, consequences and potential solutions," UNDP Africa Reports 267645, United Nations Development Programme (UNDP).
    7. Matallah, Siham, 2022. "Rampant corruption: The dilemma facing economic diversification in oil-abundant MENA countries," Resources Policy, Elsevier, vol. 75(C).
    8. repec:rac:ecchap:2017-07 is not listed on IDEAS
    9. repec:rye:wpaper:wp041} is not listed on IDEAS
    10. Marcelo M. Giugale & Nga Thi Viet Nguyen, 2018. "Money to the people: a calculation of direct dividend payments in Africa," International Economics and Economic Policy, Springer, vol. 15(1), pages 1-19, January.
    11. UNDP Regional Bureau for Africa & Haroon Bhorat & Grieve Chelwa & Karmen Naidoo & Benjamin Stanwix, "undated". "Resource Dependence and Inequality in Africa: Impacts, consequences and potential solutions," UNDP Africa Policy Notes 2017-07, United Nations Development Programme, Regional Bureau for Africa.
    12. Peszko,Grzegorz & Van Der Mensbrugghe,Dominique & Golub,Alexander Alexandrovich, 2020. "Diversification and Cooperation Strategies in a Decarbonizing World," Policy Research Working Paper Series 9315, The World Bank.

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    More about this item

    Keywords

    Africa; extractive industries; poverty; public goods; direct dividend transfers;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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