Public capital in resource rich economies: is there a curse?

Bhattacharyya, Sambit and Collier, Paul (2014) Public capital in resource rich economies: is there a curse? Oxford Economic Papers, 66 (1). pp. 1-24. ISSN 1464-3812

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Abstract

As poor countries deplete their natural resources, for increased consumption to be sustainable some of the revenues should be invested in other public assets. Further,
since such countries typically have acute shortages of public capital, the finance from resource depletion is an opportunity for needed public investment. Using a new global
panel dataset on public capital and resource rents covering the period 1970 to 2005 we find that, contrary to these expectations, resource rents significantly reduce the public
capital stock. This is more direct evidence for a policy-based ‘resource curse’ than the conventional, indirect evidence from the relationships between resource endowments,
growth and income. The adverse effect on public capital is mitigated by good institutions. We also find that rents from the depletion of non-renewable (mineral) resources
reduce the public capital stock whereas rents from sustainable (forestry and agriculture) sources do not.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography > HB0071 Economics as a science. Relation to other subjects
Related URLs:
Depositing User: Sambit Bhattacharyya
Date Deposited: 16 Jan 2013 12:03
Last Modified: 08 Mar 2017 07:28
URI: http://sro.sussex.ac.uk/id/eprint/43466

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