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Addressing the Natural Resource Curse: An Illustration From Nigeria
Author: Mr. Arvind Subramanian and Xavier Sala-i-Martin1
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund
Series:
IMF Working Papers
Volume/Issue:
Volume 2003: Issue 139
Language:
English
Publication Date:
01 Jul 2003
DOI:
https://doi.org/10.5089/9781451856064.001
ISBN:
9781451856064
ISSN:
1018-5941
Pages:
47
Keywords:
WP; natural resource; Dutch disease; exchange rate; oil revenue; private sector; natural resources; oil; Nigeria; institutions; growth; dependent variable; Nigeria dummy; natural resource variable; oil resource; resource export; growth performance; natural resource-ownership; corroborating government figures; natural resource curse; physical capital; status quo; Oil, gas and mining taxes; Oil prices; Non-renewable resources; East Asia; Sub-Saharan Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Some natural resources-oil and minerals in particular-exert a negative and nonlinear impact on growth via their deleterious impact on institutional quality. We show this result to be very robust. The Nigerian experience provides telling confirmation of this aspect of natural resources. Waste and poor institutional quality stemming from oil appear to have been primarily responsible for Nigeria's poor long-run economic performance. We propose a solution for addressing this resource curse which involves directly distributing the oil revenues to the public. Even with all the difficulties that will no doubt plague its actual implementation, our proposal will, at the least, be vastly superior to the status quo. At best, however, it could fundamentally improve the quality of public institutions and, as a result, durably raise long-run growth performance.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund

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