Resource abundance and economic development

Author: Otis
Publisher:
Publish Date: 2006-12-01
Features: Part I Introduction 1 Introduction and Overview
Part II Key Parameters of Resource-Based Development Model 2 Natural Resources, Capital Accumulation, Structural Change, and Social Stability
3 Sustainability of Resource-Driven Economies
4 Natural Resources, Human Resources, and Growth
5 Social Foundations of Slow Economic Growth in Resource-Rich Countries
Part III Long-Term Prospects and Models of Resource-Dependent Growth 6 Natural Resources and Economic Development: The Experience of 1870-1914
7 Short-Term Models Comparing Natural Resource Endowments
8 Political Economy of Resource-Rich Countries
Part IV Development Trajectories of Resource-Rich Countries 9 Competitive Industrialization Under Resource-Rich Conditions: Malaysia
10 Growth Collapse in Dispersed Resource Settings: Ghana
11 Growth Collapse in Concentrated Resource Settings: Bolivia
12 Growth Collapse in High-Rent Concentrated Resource Settings: Saudi Arabia
13 Waste of Scale Advantages by Large Resource-Rich Countries: Mexico and Argentina
Part V Policy Reforms and Lessons 14 Market Economy Reforms in Resource-Rich Small Countries: Costa Rica
15 Development, Capital Accumulation, and Economic Reforms in South Africa
16 Reforms in Resource-Rich Transition Economies: Kazakhstan and Uzbekistan
17 Reforms in Resource-Rich Large Transition Economies: Russia
18 Prospects for Resource-Rich Nordic Countries
Part VI Conclusion 19 Conclusion: Resource Abundance, Growth Collapse, and Policy Responses
Since the 1960s, countries with scarce resources have experienced much faster per capita income growth compared to resource-rich countries. By incorporating natural and social capital into the framework of growth dynamics, we can see that although resource-rich countries possess abundant resources, they make fewer policy mistakes because social pressures force them to align their interests with the dominant impoverished strata and adopt relatively cautious policies. Resource-rich countries are more prone to creating political systems where vested interest groups, at the expense of policy consistency, compete for resource surpluses. Over-reliance on primary product exports can also slow down industrialization, increase income inequality, and hinder skill accumulation.
This book examines the role of natural resources in economic development. Using historical analysis and economic models, it demonstrates that economic growth collapse is not an inevitable outcome of resource abundance but is determined by policy, and argues for the importance of initial conditions for successful economic reforms.