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Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries
Author:
Munseob Leenull

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Cheikh A. Gueye
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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 083
Language:
English
Publication Date:
28 Apr 2015
DOI:
https://doi.org/10.5089/9781484336397.001
ISBN:
9781484336397
ISSN:
1018-5941
Pages:
38
Keywords:
WP; SSA country; natural resource; commodity prices; natural resources; inclusive growth; welfare; governance; resource windfall; growth rate; resource governance index; Income distribution; Income inequality; Personal income; Sub-Saharan Africa; Global; Middle East; North Africa; East Africa
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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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We examine the impact of resource windfall on the standard of living both in the short-run and long-run, using a sample of 130 countries, 1963-2007. Then, we systematically investigate the effect of resource windfall on welfare in three different groups of countries: We find that in the short-run resource windfall is welfare enhancing in the whole sample, especially via increases in income and decreases in inequality. However, in SSA countries, the size of welfare improvement is small and it is smaller and almost zero after one year in fragile Sub-Saharan African (SSA) countries. In the whole sample, a resource windfall shock leads to significant welfare growth even in the long-run, but we couldn’t find any significant long-run effect of resource windfall in SSA countries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2015: Issue 083