Resources and Incentives to Reform: A Model and Some Evidence on Sub-Saharan African Countries
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
The paper models the incentives for a self-interested government to implement "good policies". While good policies lead to investment and growth, they reduce the government's ability to increase supporters' consumption. The model predicts that resource abundance is conductive to poor policies and, consequently, to low investment. The implications of the model are broadly supported by evidence on sub-Saharan African countries. In particular, countries that are rich in natural resources tend to have lower institutional quality and worse macroeconomic and trade policies.
Series:
Working Paper No. 2001/086
Subject:
Environment Expenditure Foreign aid Infrastructure National accounts Natural resources Private investment Public investment and public-private partnerships (PPP) Tax incentives
English
Publication Date:
June 1, 2001
ISBN/ISSN:
9781451850888/1018-5941
Stock No:
WPIEA0862001
Pages:
43
Please address any questions about this title to publications@imf.org