The Local Economic Impacts of Resource Abundance : What Have We Learned?
What are the socioeconomic impacts of resource abundance? Are these effects different at the national and local levels? How could resource booms benefit (or harm) local communities? This paper reviews a vast literature examining these questions, with an emphasis on empirical works. First, the evidence and theoretical arguments behind the so-called resource curse, and other impacts at the country level, are reviewed. This cross-country literature highlights the importance of institutions. Then, a simple analytical framework is developed to understand how resource booms could impact local communities, and the available empirical evidence is examined. This emerging literature exploits within-country variation and is opening new ways to think about the relation between natural resources and economic development. The main message is that others factors, such as market mechanisms and local spillovers, are also relevant for understanding the impact of resource abundance. Finally, the paper discusses issues related to fiscal decentralization and provides ideas for future research.
Summary: | What are the socioeconomic impacts of
resource abundance? Are these effects different at the
national and local levels? How could resource booms benefit
(or harm) local communities? This paper reviews a vast
literature examining these questions, with an emphasis on
empirical works. First, the evidence and theoretical
arguments behind the so-called resource curse, and other
impacts at the country level, are reviewed. This
cross-country literature highlights the importance of
institutions. Then, a simple analytical framework is
developed to understand how resource booms could impact
local communities, and the available empirical evidence is
examined. This emerging literature exploits within-country
variation and is opening new ways to think about the
relation between natural resources and economic development.
The main message is that others factors, such as market
mechanisms and local spillovers, are also relevant for
understanding the impact of resource abundance. Finally, the
paper discusses issues related to fiscal decentralization
and provides ideas for future research. |
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