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  5. Using Natural Resources for Development: Why Has It Proven So Difficult?

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Using Natural Resources for Development: Why Has It Proven So Difficult?

  • Anthony J. Venables
Journal of Economic Perspectives
vol. 30, no. 1, Winter 2016
(pp. 161–84)
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Abstract

Developing economies have found it hard to use natural resource wealth to improve their economic performance. Utilizing resource endowments is a multistage economic and political problem that requires private investment to discover and extract the resource, fiscal regimes to capture revenue, judicious spending and investment decisions, and policies to manage volatility and mitigate adverse impacts on the rest of the economy. Experience is mixed, with some successes (such as Botswana and Malaysia) and more failures. This paper reviews the challenges that are faced in successfully managing resource wealth, the evidence on country performance, and the reasons for disappointing results.

Citation

Venables, Anthony J. 2016. "Using Natural Resources for Development: Why Has It Proven So Difficult?" Journal of Economic Perspectives, 30 (1): 161–84. DOI: 10.1257/jep.30.1.161

Additional Materials

JEL Classification

  • Q32 Exhaustible Resources and Economic Development
  • Q33 Resource Booms
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