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

Author/Editor: Munseob Lee ; Cheikh A. Gueye
Publication Date: April 28, 2015
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: 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.
Series: Working Paper No.15/83
Subject(s): Equatorial Guinea | Eritrea | Ethiopia | Cameroon | Burundi | Burkina Faso | Botswana | Benin | Africa | Angola | Djibouti | Commodity boom | Commodity prices | Comoros | Congo, Republic of | Congo, Democratic Republic of the | Chad | Central African Republic | Cross country analysis | Corruption | Guinea-Bissau | Guinea | Governance | Income | Inclusive growth | Gambia, The | Gabon | Ghana | Mauritania | Mali | Mauritius | Nigeria | Niger | Mozambique | Namibia | Natural resources | Lesotho | Liberia | Malawi | Madagascar | Kenya | Panel analysis | Rwanda | Rent | Sierra Leone | Senegal | Seychelles | South Africa | Uganda | Togo | Sub-Saharan Africa | Swaziland | Sudan | Tanzania | Zimbabwe | Zambia | Welfare

Publication Date: April 28, 2015
ISBN/ISSN: 9781484336397/1018-5941 Format: Paper
Stock No: WPIEA2015083 Pages: 38
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