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Economics of Development Based on Commodity Revenues


  • S. Guriev
  • A. Plekhanov
  • K. Sonin.


Commodity resources offer vast opportunities for development. In the long run, however, the performance of commodity-rich countries tends to fall short of expectations, as commodity rents induce macroeconomic volatility and undermine incentives to improve institutions. The paper looks at the strategies that countries can adopt to avoid the "resource trap". These strategies aim at diversifying the economy, promoting financial development, building up stabilization buffers that lower macroeconomic volatility, and reducing inequality. The resource-rich transition countries have embraced these strategies to varying degrees, and with varying success. Improving institutions remains the key challenge.

Suggested Citation

  • S. Guriev & A. Plekhanov & K. Sonin., 2010. "Economics of Development Based on Commodity Revenues," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
  • Handle: RePEc:nos:voprec:2010-03-1

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    Cited by:

    1. Timushev, Evgeny, 2016. "Independence Decrease and Centralization: Analysis of Expenditures of the Consolidated Budget of the Komi Republic," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 131-152, August.
    2. Irina Ilina, 2013. "Outlook toward the future development of primary producer regions of Russia as expressed in the documents of strategic planning," Public administration issues, Higher School of Economics, issue 2, pages 83-102.

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