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Resource Management and Transition in Central Asia, Azerbaijan, and Mongolia


  • Richard Pomfret

    () (Peterson Institute for International Economics)


The paper presents a comparative analysis of the resource-rich transition economies of Mongolia and the southern republics of the former Soviet Union. For Uzbekistan and Turkmenistan, the ability to earn revenue from cotton exports allowed them to avoid reform. Oil in Azerbaijan and Kazakhstan was associated with large-scale corruption, but with soaring revenues in the 2000s their institutions evolved and to some extent improved. Kyrgyzstan and Mongolia illustrate the challenges facing small economies with large potential mineral resources, with the former suffering from competition for rents among the elite and the latter from lost opportunities. Overall the countries illustrate that a resource curse is not inevitable among transition economies, but a series of hurdles need to be surmounted to benefit from resource abundance. Neither the similar initial institutions nor those created in the 1990s are immutable.

Suggested Citation

  • Richard Pomfret, 2011. "Resource Management and Transition in Central Asia, Azerbaijan, and Mongolia," Working Paper Series WP11-8, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp11-8

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    References listed on IDEAS

    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
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    3. Yelena Kalyuzhnova & Michael Kaser, 2006. "Prudential Management of Hydrocarbon Revenues in Resource-rich Transition Economies," Post-Communist Economies, Taylor & Francis Journals, vol. 18(2), pages 167-187.
    4. repec:wsi:wschap:9789813108448_0012 is not listed on IDEAS
    5. van der Ploeg, Frederick & Poelhekke, Steven, 2010. "The pungent smell of "red herrings": Subsoil assets, rents, volatility and the resource curse," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 44-55, July.
    6. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    7. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    8. Yelena Kalyuzhnova, 2006. "Overcoming the Curse of Hydrocarbon: Goals and Governance in the Oil Funds of Kazakhstan and Azerbaijan," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(4), pages 583-613, December.
    9. Alexeev, Michael & Conrad, Robert, 2011. "The natural resource curse and economic transition," Economic Systems, Elsevier, vol. 35(4), pages 445-461.
    10. David G. Tarr, 2017. "The Terms-of-Trade Effects of Moving to World Prices on Countries of the Former Soviet Union," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 12, pages 271-294 World Scientific Publishing Co. Pte. Ltd..
    11. Anne D. Boschini & Jan Pettersson & Jesper Roine, 2007. "Resource Curse or Not: A Question of Appropriability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(3), pages 593-617, September.
    12. 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.
    13. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
    14. Boyce, John R. & Herbert Emery, J.C., 2011. "Is a negative correlation between resource abundance and growth sufficient evidence that there is a "resource curse"?," Resources Policy, Elsevier, vol. 36(1), pages 1-13, March.
    15. Mateusz Walewski & Alexander Chubrik, 2010. "Oil-led economic growth and the distribution of Real Household Incomes and Consumption in Azerbaijan," CASE Network Studies and Analyses 417, CASE-Center for Social and Economic Research.
    16. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
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    Cited by:

    1. Kjetil Bjorvatn & Tina Søreide, 2014. "Corruption and competition for resources," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(6), pages 997-1011, December.
    2. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    3. repec:gam:jecomi:v:5:y:2017:i:2:p:19-:d:101264 is not listed on IDEAS
    4. Yuldashev, Farhod & Sahin, Bahadir, 2016. "The political economy of mineral resource use: The case of Kyrgyzstan," Resources Policy, Elsevier, vol. 49(C), pages 266-272.

    More about this item


    Oil; Gas; Minerals; Central Asia; Resource Curse;

    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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