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Sustainable development in mineral economies: the example of Botswana

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  • LANGE, GLENN-MARIE
  • WRIGHT, MATTHEW

Abstract

The Hartwick–Solow rule for sustainability requires that depletion of natural capital be offset by a compensating increase in other forms of capital capable of generating as much income as the natural capital they replace. Many countries have not been successful in transforming natural capital into other forms of wealth. This paper investigates the process of wealth transformation for Botswana, one of the most successful resource-rich countries. Using an expanded measure of wealth that includes manufactured capital, natural capital and net foreign financial assets, Botswana's per capita wealth has increased over the past 20 years. Government has recovered and reinvested rent. However, examination of the public sector capital budget reveals considerable unproductive investment. While correction for unproductive investments still indicates sustainable development, results suggest that aggregate indicators such as national wealth or genuine savings may be misleading without further attention to the process by which natural capital is transformed into other forms of wealth.

Suggested Citation

  • Lange, Glenn-Marie & Wright, Matthew, 2004. "Sustainable development in mineral economies: the example of Botswana," Environment and Development Economics, Cambridge University Press, vol. 9(4), pages 485-505, August.
  • Handle: RePEc:cup:endeec:v:9:y:2004:i:04:p:485-505_00
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    Cited by:

    1. Hamilton, Kirk & Ley, Eduardo, 2010. "Measuring National Income and Growth in Resource-Rich, Income-Poor Countries," World Bank - Economic Premise, The World Bank, issue 28, pages 1-7, August.
    2. Arezki, Rabah & Hadri, Kaddour & Loungani, Prakash & Rao, Yao, 2014. "Testing the Prebisch–Singer hypothesis since 1650: Evidence from panel techniques that allow for multiple breaks," Journal of International Money and Finance, Elsevier, vol. 42(C), pages 208-223.
    3. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    4. Jorgensen, Ole Hagen, 2013. "Efficiency and equity implications of oil windfalls in Brazil," Policy Research Working Paper Series 6597, The World Bank.
    5. Grace Nishimwe & Didier Milindi Rugema & Claudine Uwera & Cor Graveland & Jesper Stage & Swaib Munyawera & Gabriel Ngabirame, 2020. "Natural Capital Accounting for Land in Rwanda," Sustainability, MDPI, vol. 12(12), pages 1-25, June.
    6. Southalan, John, 2011. "What are the implications of human rights for minerals taxation?," Resources Policy, Elsevier, vol. 36(3), pages 214-226, September.
    7. Arezki, Rabah & Hadri, Kaddour & Loungani, Prakash & Rao, Yao, 2014. "Testing the Prebisch–Singer hypothesis since 1650: Evidence from panel techniques that allow for multiple breaks," Journal of International Money and Finance, Elsevier, vol. 42(C), pages 208-223.

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