How Much of Economic Growth Trickles Down to the Population in Resource-Rich Countries ? Evidence from Papua New Guinea

There was substantial growth in the resource sector in Papua New Guinea during the last resource boom, increased revenue collection by the government associated with that growth, and significant increases in international assistance, all which might have translated into improved well-being outcomes across the country. For a better understanding of whether these changes improved household-level outcomes, this paper updates estimates of key well-being outcomes in the country. The analysis imputes monetary poverty status using nonmonetary indicators in the 2016 –18 Demographic and Health Survey and estimates the World Bank’s Multidimensional Poverty Measure. Despite the country’s significant growth since 2009, monetary poverty and access to several essential services hardly changed, which stands in stark contrast to the substantial improvement across the rest of the world and other comparison regions over the same period. Combined, the results illustrate that it is possible that very little of resource-led growth trickles down to the population and that the link between macroeconomic and microeconomic outcomes is more tenuous in Papua New Guinea than found in other resource-intensive settings.