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

November 12, 2015

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Format: Chicago

Andrew M. Warner Natural Resource Booms in the Modern Era: Is the curse still alive?, (USA: International Monetary Fund, 2015) accessed December 3, 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

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.

Subject: Commodities, Environment, Expenditure, Human capital, Labor, Natural resources, Oil, Public expenditure review, Public investment spending

Keywords: Africa, Boom period, Civil war, Counterfactual period, Dutch Disease, Eastern Europe, Economic Growth, GDP per-capita, Global, Human capital, Natural resource, Natural resources, Oil, Public expenditure review, Public Investment, Public investment spending, Real GDP, Resource boom, Resource Booms, Resource rent, WP

Publication Details

Pages:

54
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/237
Stock No:

WPIEA2015237
ISBN:

9781513507224
ISSN:

1018-5941

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