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  • Agricultural and Natural Resource Economics; Environmental and Ecological Economics: General x
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Mr. Paul Collier

Africa's Middle-Class Motor finds growing evidence that a recent resurgence in the continent's economic well-being has staying power. In his overview article, Harvard professor Calestous Juma says the emphasis for too long has been on eradicating poverty through aid rather than promoting prosperity through improved infrastructure, education, entrepreneurship, and trade. That is now changing: there is a growing emphasis on policies that produce a middle class. The new African middle class may not have the buying power of a Western middle class but it demands enough goods and services to support stronger economic growth, which, as IMF African Department head Antoinette Sayeh points out, in turn helps the poorest members of society. Oxford University economist Paul Collier discusses a crucial component of Africa's needed infrastructure: railways. It is a continent eminently suited to rail, development of which has been held back more by political than economic reasons. But even as sub-Saharan African thrives, its largest and most important economy, South Africa, has had an anemic performance in recent years. We also profile Ngozi Okonjo-Iweala, Nigeria's colorful economic czar. "Picture This" mines current trends to predict what Africa will look like a half century from now and "Data Spotlight" looks at increased regional trade in Africa. Elsewhere, Cornell Professor Eswar Prasad, examines a global role reversal in which emerging, not advanced, economies are displaying resilience in the face of the global economic crisis. The University of Queensland's John Quiggin, who wrote Zombie Economics, examines whether it makes sense in many cases to sell public enterprises. Economists Raghuram Rajan of the University of Chicago and Rodney Ramcharan of the U.S. Federal Reserve find clues to current asset booms and busts in the behavior of U.S. farmland prices a century ago.

Mr. Rabah Arezki, Gregoire Rota-Graziosi, and Lemma W. Senbet

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

Charlotte J. Lundgren, Mr. Alun H. Thomas, and Mr. Robert C York
Un nombre croissant de pays d'Afrique subsaharienne disposent de ressources naturelles considérables ; leur extraction pourrait générer d'importantes retombées financières qui présentent un potentiel inédit de croissance économique et de développement. Pourtant, force est de constater qu’il n’est pas simple de mettre ces richesses au service du développement économique et de l’amélioration des niveaux de vie. On a beaucoup écrit sur la « malédiction des ressources naturelles ». Cette publication examine ce que peuvent faire les pouvoirs publics face à ces défis et présente les principales considérations de politique économique et les options envisageables pour gérer les ressources naturelles, en s'appuyant sur l'expérience des pays d'Afrique subsaharienne et d'autres régions, sur la dernière analyse du FMI et ses conseils en la matière, ainsi que sur des études de la Banque mondiale et les travaux d'éminents universitaires. Chaque chapitre comporte une liste de documents dont la lecture est recommandée aux décideurs et autres parties prenantes pour les informer plus en détail sur les fondements théoriques et analytiques des conseils fournis.
Charlotte J. Lundgren, Mr. Alun H. Thomas, and Mr. Robert C York
Sizeable natural resource endowments and potentially large financial inflows from their extraction provide an unparalleled opportunity for economic growth and development in a growing number of sub-Saharan African countries. Empirical evidence suggests, however, that translating this resource wealth into stronger economic performance and a higher standard of living has proven challenging. Much has been written about the resource curse. This publication focuses on solutions to the challenges and outlines the main policy considerations and options in managing natural resource wealth, drawing on experience within and outside sub-Saharan Africa and referring closely to the latest analysis and policy advice in this area by the IMF, the World Bank, and leading academic research. A key feature of each chapter is a recommended reading list for those who wish additional, more in-depth material on these issues to further inform policymakers and other stakeholders on the theoretical and analytical underpinnings of the policy advice.
Charlotte J. Lundgren, Mr. Alun H. Thomas, and Mr. Robert C York
Sizeable natural resource endowments and potentially large financial inflows from their extraction provide an unparalleled opportunity for economic growth and development in a growing number of sub-Saharan African countries. Empirical evidence suggests, however, that translating this resource wealth into stronger economic performance and a higher standard of living has proven challenging. Much has been written about the resource curse. This publication focuses on solutions to the challenges and outlines the main policy considerations and options in managing natural resource wealth, drawing on experience within and outside sub-Saharan Africa and referring closely to the latest analysis and policy advice in this area by the IMF, the World Bank, and leading academic research. A key feature of each chapter is a recommended reading list for those who wish additional, more in-depth material on these issues to further inform policymakers and other stakeholders on the theoretical and analytical underpinnings of the policy advice.
International Monetary Fund. Fiscal Affairs Dept.

Abstract

This issue of the Fiscal Monitor examines the conduct of fiscal policy under the uncertainty caused by dependence on natural resource revenues. It draws on extensive past research on the behavior of commodity prices and their implications for macroeconomic outcomes, as well as on extensive IMF technical assistance to resource-rich economies seeking to improve their management of natural resource wealth.

International Monetary Fund. African Dept.
This Selected Issues paper focuses on macro-critical issues related to governance and corruption in Democratic Republic of the Congo (DRC). Third-party indicators suggest that governance has been poor and corruption widespread in the country. Conducting an audit of the civil service and improving the transparency of its remuneration system, simplifying tax payment processes, and merging the activities of the numerous revenue agencies would boost public efficiency and improve the business environment. Contract enforcement and protection of property rights could be enhanced by insulating the courts from external influence. Limited information on the budget annexes and special accounts and little or no oversight by the central government, Parliament, and civil society, create scope for corruption. The multiplicity of special taxes and fees, some accruing to special accounts outside the Treasury, generate opportunities for corruption and informalization of economic activity. Despite some progress in strengthening public financial management, budget execution remains deficient. The government has formalized the four stages of the expenditure chain and introduced budget commitment plans to align expenditures with revenues.
Mr. Dhaneshwar Ghura and Ms. Rina Bhattacharya
This paper investigates the linkages between oil and growth in Congo, where there appears to be no evidence of direct spillover effects. The empirical results suggest however that political instability has a negative effect on non-oil growth, and that the presence of oil could have fueled political instability by being associated with weakening institutions. The results also show that fiscal discipline is beneficial for growth. In addition, there are strong linkages between world oil prices and the real effective exchange rate, with movements in the latter having important indirect repercussions for growth.
Mr. Rabah Arezki and Frederik van der Ploeg
We criticize existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness, and initial income. These results do not survive once we use instrumental variables techniques to correct for the endogenous nature of the explanatory variables. Furthermore, they suffer from omitted variables bias as they overestimate the effect of initial income per capita and thus underestimate the speed of conditional convergence. Instead, we provide new evidence for the impact of natural resource dependence on income per capita in a systematic empirical cross-country framework. In addition to a significant negative direct impact of natural resources on income per capita, we find a significant indirect effect of natural resources on institutions. We allow for interaction effects and provide evidence that the natural resource curse is particularly severe for economic performance in countries with a low degree of trade openness. Adopting policies directed toward more trade openness may thus soften the impact of a resource curse. We also check the robustness of our results by using a variety of instruments and also employing the ratio of natural capital rather than natural resource exports to national income as an explanatory variable. We find evidence that resource abundance, measured by the stock of natural capital, also induces a resource curse, but less severely for countries that are relatively open.