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A Dual-track Strategy for Managing Mauritania's Projected Oil Rent

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  • Richard Auty
  • Nicola Pontara

Abstract

High rent creates contests for its capture that, unless skilfully managed, degrade political institutions and distort the economy, leading to a collapse of growth if unreformed. Mauritania's projected oil stream risks such an outcome because past rent-driven growth has left a legacy of Dutch disease effects, rent-seeking and dependent social capital. This article proposes a dual-track strategy for deploying the oil rent as a politically practical means of managing social tensions and improving the economic outcome. Track one promotes a dynamic market economy in the hitherto neglected rural areas, while track two gradually reforms the rent-driven urban sector, thus postponing confrontation with established rent-seekers while the dynamic sector drives competitive diversification of the economy and builds a pro-reform political constituency. Copyright 2008 Blackwell Publishing Ltd.

Suggested Citation

  • Richard Auty & Nicola Pontara, 2008. "A Dual-track Strategy for Managing Mauritania's Projected Oil Rent," Development Policy Review, Overseas Development Institute, vol. 26(1), pages 59-77, January.
  • Handle: RePEc:bla:devpol:v:26:y:2008:i:1:p:59-77
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    1. repec:eee:touman:v:32:y:2011:i:5:p:1223-1228 is not listed on IDEAS
    2. Wiig, Arne & Kolstad, Ivar, 2012. "If diversification is good, why don't countries diversify more? The political economy of diversification in resource-rich countries," Energy Policy, Elsevier, vol. 40(C), pages 196-203.
    3. Magnoli Bocchi, Alessandro & Pontara, Nicola & Fall, Khayar & Tejada, Catalina M. & Cuervo, Pablo Gallego, 2008. "Reaching the millennium development goals : Mauritania should care," Policy Research Working Paper Series 4674, The World Bank.
    4. World Bank, 2010. "Mauritania - Policy Options to Enhance Private Sector Development : Country Economic Memorandum," World Bank Other Operational Studies 2858, The World Bank.
    5. repec:eee:touman:v:32:y:2011:i:5:p:1229-1231 is not listed on IDEAS

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