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Natural Resource Booms in the Modern Era: Is the curse still alive?

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  • Mr. Andrew M. Warner

Abstract

The global boom in hydrocarbon, metal and mineral prices since the year 2000 created huge economic rents - rents which, once invested, were widely expected to promote productivity growth in other parts of the booming economies, creating a lasting legacy of the boom years. This paper asks whether this has happened. To properly address this question the empirical strategy must look behind the veil of the booming sector because that, by definition, will boom in a boom. So the paper considers new data on GDP per person outside of the resource sector. Despite having vast sums to invest, GDP growth per-capita outside of the booming sectors appears on average to have been no faster during the boom years than before. The paper finds no country in which (non-resource) growth per-person has been statisticallysignificantly higher during the boom years. In some Gulf states, oil rents have financed a migration-facilitated economic expansion with small or negative productivity gains. Overall, there is little evidence the booms have left behind the anticipated productivity transformation in the domestic economies. It appears that current policies are, overall, prooving insufficient to spur lasting development outside resource intensive sectors.

Suggested Citation

  • Mr. Andrew M. Warner, 2015. "Natural Resource Booms in the Modern Era: Is the curse still alive?," IMF Working Papers 2015/237, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2015/237
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    References listed on IDEAS

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    Cited by:

    1. Jorge Gallego & Stanislao Maldonado & Lorena Trujillo, 2018. "Blessing a Curse? Institutional Reform and Resource Booms in Colombia," Documentos de Trabajo 16225, Universidad del Rosario.
    2. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 09816, Department of Economics, University of Sussex Business School.
    3. Mavungu, Marina Ngoma & Krsic, Nikolina, 2017. "Assessing the impact of tax administration reforms in Sub-Saharan Africa," MPRA Paper 89275, University Library of Munich, Germany.
    4. Jayanthakumaran, Kankesu & Bari, Mohammad Tariful, 2021. "Resource boom and non-resource firms: Mongolia 2007 and 2011," Resources Policy, Elsevier, vol. 74(C).
    5. Alsharif, Nouf & Bhattacharyya, Sambit & Intartaglia, Maurizio, 2017. "Economic diversification in resource rich countries: History, state of knowledge and research agenda," Resources Policy, Elsevier, vol. 52(C), pages 154-164.
    6. Cust,James Frederick & Mihalyi,David, 2017. "Evidence for a presource curse ? oil discoveries, elevated expectations, and growth disappointments," Policy Research Working Paper Series 8140, The World Bank.
    7. Cust,James Frederick & Rivera Ballesteros,Alexis & Zeufack,Albert G., 2022. "The Dog that Didn’t Bark : The Missed Opportunity of Africa’s Resource Boom," Policy Research Working Paper Series 10120, The World Bank.
    8. Elwasila Saeed Elamin Mohamed, 2020. "Resource Rents, Human Development and Economic Growth in Sudan," Economies, MDPI, vol. 8(4), pages 1-21, November.
    9. Byaro, Mwoyo & Kinyondo, Abel, 2020. "Institutional Quality Explains the Difference of Natural Gas Revenues to Contribute in the Economy: Empirical Evidence from Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 8(3), November.
    10. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 9816, Department of Economics, University of Sussex.
    11. Gallego, Jorge & Maldonado, Stanislao & Trujillo, Lorena, 2020. "From curse to blessing? institutional reform and resource booms in Colombia," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 174-193.

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