Natural Resource Booms in the Modern Era: Is the curse still alive?

IMF Working Papers, November 12, 2015

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The global boom in hydrocarbon, metal and mineral prices since the year 2000 created huge economic rents that were widely expected to, once invested, promote productivity growth in other parts of booming economies and create a lasting legacy of the boom years.
Using new data on GDP per person outside of the resource sector, the paper finds that GDP growth per-capita outside of booming sectors appears on average to have been no faster during the boom years than before.
The paper finds no country in which (non-resource) growth per-person has been statistically significantly higher during the boom years.
In some Gulf states, oil rents financed a migration-facilitated economic expansion with small or negative productivity gains.
Overall, there is little evidence that the booms have left behind the anticipated productivity transformation in domestic economies.
It appears that current policies are, overall, proving insufficient to spur lasting development outside resource-intensive sectors.

Focus: GDP per person outside of the resource sector to avoid the automatic expansion of the booming sector itself.
Timeframe highlighted: booms since the year 2000 (boom years) compared to pre-boom (before the boom years).
Sample and thematic coverage (as stated): Commodities; Environment; Expenditure; Human capital; Labor; Natural resources; Oil; Public expenditure review; Public investment spending.
Keywords included in the paper: Africa, boom period, civil war, counterfactual period, Dutch Disease, Eastern Europe, Economic Growth, GDP per-capita, Global, Human capital, natural resource, Natural resources, Oil, Public expenditure review, Public Investment, Public investment spending, real GDP, resource boom, Resource Booms, resource rent, WP.

Despite large resource rents, there is little empirical evidence the resource booms generated higher non-resource productivity growth across countries.
The experience in some Gulf states suggests that financing expansion with oil rents can coincide with migration-driven growth that yields small or negative productivity gains, indicating growth without productivity transformation.
The paper implies current policy frameworks and investment decisions during booms are, overall, insufficient to achieve lasting development outside resource-intensive sectors.