Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries

April 28, 2015

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Format: Chicago

Munseob Lee, and Cheikh A. Gueye Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries, (USA: International Monetary Fund, 2015) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We examine the impact of resource windfall on the standard of living both in the short-run and long-run, using a sample of 130 countries, 1963-2007. Then, we systematically investigate the effect of resource windfall on welfare in three different groups of countries: We find that in the short-run resource windfall is welfare enhancing in the whole sample, especially via increases in income and decreases in inequality. However, in SSA countries, the size of welfare improvement is small and it is smaller and almost zero after one year in fragile Sub-Saharan African (SSA) countries. In the whole sample, a resource windfall shock leads to significant welfare growth even in the long-run, but we couldn’t find any significant long-run effect of resource windfall in SSA countries.

Subject: Environment, Health, Income distribution, Income inequality, National accounts, Natural resources, Personal income

Keywords: Commodity prices, East Africa, Global, Governance, Growth rate, Inclusive growth, Income distribution, Income inequality, Middle East, Natural resource, Natural resources, North Africa, Personal income, Resource governance index, Resource windfall, SSA country, Sub-Saharan Africa, Welfare, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/083
Stock No:

WPIEA2015083
ISBN:

9781484336397
ISSN:

1018-5941

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