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Exploiting Energy and Mineral Resources in Central Asia, Azerbaijan and Mongolia

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  • Richard Pomfret

    () (School of Economics, University of Adelaide, Adelaide, SA 5005, Australia.
    The Johns Hopkins University, via Belmeloro 11, 40126 Bologna, Italy)

Abstract

Formerly centrally planned countries may be especially vulnerable to institutional degradation and revenue volatility as sources of a resource curse. This paper examines these issues through case studies of six former Soviet republics and Mongolia, focussing on the methods of involving foreign partners in exploration and exploitation of natural resources. Kazakhstan in the 1990s was a prime example of rent-seeking institutional degradation, but an exceptionally positive conjuncture in the 2000s triggered institutional and policy evolution, while Uzbekistan had less resource-rent-driven institutional degradation in the 1990s, but stagnated in the 2000s. Turkmenistan and Mongolia highlight the missed opportunities from not involving foreign partners, while Azerbaijan and the Kyrgyz Republic illustrate the less predictable outcomes following quick deals with foreign investors. Institutions matter, but the case studies suggest more complex relationships than revealed by simple correlations between indicators of institutional quality or of ownership patterns.

Suggested Citation

  • Richard Pomfret, 2011. "Exploiting Energy and Mineral Resources in Central Asia, Azerbaijan and Mongolia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(1), pages 5-33, March.
  • Handle: RePEc:pal:compes:v:53:y:2011:i:1:p:5-33
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    References listed on IDEAS

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    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    2. Alexander Chubrik & Mateusz Walewski, 2010. "Oil Money vs. Economic Crisis: The Case of Azerbaijan," CASE Network E-briefs 06, CASE-Center for Social and Economic Research.
    3. Christa Brunnschweiler, 2009. "Oil and Growth in Transition Countries," OxCarre Working Papers 029, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    4. Marc Gronwald & Johannes Mayr & Sultan Orazbayev, 2009. "Estimating the effects of oil price shocks on the Kazakh economy," ifo Working Paper Series 81, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Geir Asheim & Wolfgang Buchholz & Cees Withagen, 2003. "The Hartwick Rule: Myths and Facts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 129-150, June.
    6. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    7. Richard Pomfret, 2009. "Using Energy Resources to Diversify the Economy: Agricultural Price Distortions in Kazakhstan," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(2), pages 181-212, June.
    8. Kalyuzhnova, Yelena & Nygaard, Christian, 2008. "State governance evolution in resource-rich transition economies: An application to Russia and Kazakhstan," Energy Policy, Elsevier, vol. 36(6), pages 1829-1842, June.
    9. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, vol. 33(7), pages 1029-1044, July.
    10. Pomfret, Richard, 2004. "Resource Abundance, Governance And Economic Performance In Turkmenistan And Uzbekistan," Discussion Papers 18735, University of Bonn, Center for Development Research (ZEF).
    11. Boris Najman & Richard Pomfret & Gael Raballand, 2007. "The Economics and Politics of Oil in the Caspian Basin," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00266724, HAL.
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    Citations

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    Cited by:

    1. Karen, Smith Stegen, 2011. "Deconstructing the "energy weapon": Russia's threat to Europe as case study," Energy Policy, Elsevier, vol. 39(10), pages 6505-6513, October.
    2. Pomfret, Richard, 2012. "Resource management and transition in Central Asia, Azerbaijan and Mongolia," Journal of Asian Economics, Elsevier, vol. 23(2), pages 146-156.
    3. repec:gam:jecomi:v:5:y:2017:i:2:p:19-:d:101264 is not listed on IDEAS
    4. repec:pal:compes:v:59:y:2017:i:3:d:10.1057_s41294-017-0028-2 is not listed on IDEAS
    5. Annageldy Arazmuradov, 2012. "Foreign Aid, Foreign Direct Investment, and Domestic Investment Nexus in Landlocked Economies of Central Asia," Economic Research Guardian, Weissberg Publishing, vol. 2(1), pages 129-151, May.
    6. Arman Mazhikeyev & T.Huw Edwards & Marian Rizov, 2014. "Openness and Isolation: the comparative trade performance of the Former Soviet Central Asian countries," Discussion Paper Series 2014_02, Department of Economics, Loughborough University, revised Feb 2014.
    7. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    8. repec:eee:jrpoli:v:53:y:2017:i:c:p:1-11 is not listed on IDEAS
    9. Mazhikeyev, Arman & Edwards, T. Huw & Rizov, Marian, 2015. "Openness and isolation: The trade performance of the former Soviet Central Asian countries," International Business Review, Elsevier, vol. 24(6), pages 935-947.

    More about this item

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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