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Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa
Centre for Environmental and Resource Economics, Umeå University, Umeå, Sweden; University of Ghana Business School, Ghana.
The Nordic Africa Institute, Uppsala University, Uppsala, Sweden; Department of Economics, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.
Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden.
Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden.
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2017 (English)In: Review of Development Economics, ISSN 1363-6669, E-ISSN 1467-9361, Vol. 21, no 4, p. 107-130Article in journal (Refereed) Published
Abstract [en]

The general policy prescription for resource-rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channeled into accumulating foreign assets such as a sovereign public fund as done in Norway and other developed but resource-rich countries. This might not be a correct policy prescription for resource-rich sub-Saharan African (SSA) countries, where public capital is very low to support the needed economic growth. In such countries, rents from resources serve as an opportunity to scale-up the needed public capital. Using a panel data for the period 1990–2013, we find in line with the scaling-up hypothesis that resource rents significantly increases public investment in SSA and that this tends to depend on the quality of political institutions. Moreover, we also find evidence of a positive effect of public investment on economic growth, which also depends on the level of resource rents.

Place, publisher, year, edition, pages
John Wiley & Sons, 2017. Vol. 21, no 4, p. 107-130
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Economics
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URN: urn:nbn:se:ltu:diva-88384DOI: 10.1111/rode.12313ISI: 000423410200006Scopus ID: 2-s2.0-85015222920OAI: oai:DiVA.org:ltu-88384DiVA, id: diva2:1619652
Note

Funder: United Nations University World Institute for Development Economics Research (UNU-WIDER)

Available from: 2021-12-13 Created: 2021-12-13 Last updated: 2022-04-04Bibliographically approved

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Amuakwa-Mensah, Franklin

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