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Resources and Incentives to Reform; A Model and Some Evidenceon Sub-Saharan African Countries

  • Guido De Blasio
  • A. Dalmazzo
Registered author(s):

    The paper models the incentives for a self-interested government to implement "good policies". While good policies lead to investment and growth, they reduce the government's ability to increase supporters' consumption. The model predicts that resource abundance is conductive to poor policies and, consequently, to low investment. The implications of the model are broadly supported by evidence on sub-Saharan African countries. In particular, countries that are rich in natural resources tend to have lower institutional quality and worse macroeconomic and trade policies.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/86.

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    Length: 43
    Date of creation: 01 Jun 2001
    Date of revision:
    Handle: RePEc:imf:imfwpa:01/86
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    8. International Monetary Fund, 2000. "Institutions Matter in Transition, But so do Policies," IMF Working Papers 00/70, International Monetary Fund.
    9. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
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    21. Dollar, David & Easterly, William, 1999. "The Search for the Key: Aid, Investment and Policies in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(4), pages 546-77, December.
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