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Is Chad affected by Dutch or Nigerian disease?

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  • Kablan, Sandrine
  • Loening, Josef

Abstract

We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 39799.

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Date of creation: 30 Jun 2012
Date of revision: 02 Jul 2012
Handle: RePEc:pra:mprapa:39799

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Keywords: Natural resource curse; Dutch disease; Chad; Structural VAR;

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  1. Benjamin, Nancy C. & Devarajan, Shantayanan & Weiner, Robert J., 1989. "The Dutch disease in a developing country : Oil reserves in Cameroon," Journal of Development Economics, Elsevier, vol. 30(1), pages 71-92, January.
  2. Rabah Arezki & Markus Bruckner, 2010. "Resource Windfalls and Emerging Market Sovereign Bond Spreads: The Role of Political Institutions," IMF Working Papers 10/179, International Monetary Fund.
  3. Katerina Kalcheva & Nienke Oomes, 2007. "Diagnosing Dutch Disease: Does Russia Have the Symptoms?," IMF Working Papers 07/102, International Monetary Fund.
  4. Matsuyama, K., 1992. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Working Papers e-92-3, Hoover Institution, Stanford University.
  5. Levy, Stephanie, 2006. "Public investment to reverse Dutch disease: the case of Chad," DSGD discussion papers 35, International Food Policy Research Institute (IFPRI).
  6. Brahmbhatt, Milan & Canuto, Otaviano & Vostroknutova, Ekaterina, 2010. "Dealing with Dutch Disease," World Bank - Economic Premise, The World Bank, issue 16, pages 1-7, June.
  7. Brahmbhatt, Milan & Canuto, Otaviano, 2010. "Natural Resources and Development Strategy after the Crisis," World Bank - Economic Premise, The World Bank, issue 1, pages 1-7, February.
  8. Bjornland, Hilde Christiane, 1998. "The Economic Effects of North Sea Oil on the Manufacturing Sector," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(5), pages 553-85, November.
  9. Eugenio Cerutti & Mario Mansilla, 2008. "Bolivia: The Hydrocarbons Boom and the Risk of Dutch Disease," IMF Working Papers 08/154, International Monetary Fund.
  10. Drelichman, Mauricio, 2005. "The curse of Moctezuma: American silver and the Dutch disease," Explorations in Economic History, Elsevier, vol. 42(3), pages 349-380, July.
  11. repec:fth:stanho:e-92-3 is not listed on IDEAS
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