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How to spend it: resource wealth and the distribution of resource rents

  • Paul Segal

Natural resource revenues differ from other government revenues both in their time profile, and in their political and legal status: they are volatile and exhaustible, and belong to all citizens of the country in which they are located. This paper discusses the optimal expenditure of natural resource revenues, based on economic theory and with reference to existing international practices. It considers both the distributional impact and the efficiency of alternative policies, focusing on the extent to which they succeed in providing all citizens with their share of the benefits due to natural resources. It also shows how, by dropping the assumption of a representative agent, a concern for poverty and social welfare more generally interacts with and alters standard recommendations for the intertemporal management of resource revenues.

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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 55664.

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Length: 37 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:ehl:lserod:55664
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  1. Stijns, Jean-Philippe C., 2005. "Natural resource abundance and economic growth revisited," Resources Policy, Elsevier, vol. 30(2), pages 107-130, June.
  2. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
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  8. Mehlum, Halvor & Moene, Karl-Ove & Torvik, Ragnar, 2003. "Institutions and the resource curse," Memorandum 29/2002, Oslo University, Department of Economics.
  9. Daniel Leigh & Etibar Jafarov, 2007. "Alternative Fiscal Rules for Norway," IMF Working Papers 07/241, International Monetary Fund.
  10. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
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  12. Christa N. Brunnschweiler & Erwin H. Bulte, 2006. "The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings," CER-ETH Economics working paper series 06/61, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  13. Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse: An Illustration From Nigeria," IMF Working Papers 03/139, International Monetary Fund.
  14. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, June.
  15. Segal, Paul, 2011. "Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend," World Development, Elsevier, vol. 39(4), pages 475-489, April.
  16. Christopher Adam & Anthony Simpasa, 2010. "Harnessing Resource Revenues for Prosperity in Zambia," OxCarre Working Papers 036, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  17. John Thornton & Fabian Bornhorst & Sanjeev Gupta, 2008. "Natural Resource Endowments, Governance, and the Domestic Revenue Effort: Evidence from a Panel of Countries," IMF Working Papers 08/170, International Monetary Fund.
  18. Wilfred Beckerman & Cameron Hepburn, 2007. "Ethics of the Discount Rate in the Stern Review on the Economics of Climate Change," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 8(1), pages 187-210, January.
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