Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229332
Authors: 
Chang, Ha-joon
Lebdioui, Amir
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/108
Abstract: 
The management of revenues from exhaustible natural resources involves a number of challenges. In this paper, we argue that the standard policy advice to managers of resource revenues has been dominated by short-termism and the lack of a perspective on economic development and structural transformation. As a result, mainstream approaches have often addressed only the symptoms of commodity dependence (e.g. vulnerability to commodity price volatility) rather than its root causes (insufficiently diversified productive structures). This paper starts by mapping out the various options for managing resource revenues, and reviews their respective economic and political implications. After discussing the limitations of existing theoretical approaches, we suggest an alternative resource revenue management model that is more suited to the context of commodity-dependent developing countries. This approach, which consists in the gradual scaleup of investments in productivity-enhancing assets, enables the alignment of the dual objectives of short-term stabilization and long-term diversification.
Subjects: 
commodity dependence
economic development
natural resources
resource revenue management
structural transformation
JEL: 
O14
O25
Q32
Q33
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-865-8
Document Type: 
Working Paper

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