The Local Economic Impacts of Resource Abundance : What Have We Learned ?

World Bank / by Fernando M. Aragón, et al.

What are the socioeconomic impacts of resource abundance? Are these effects different at the national and local levels? How could resource booms benefit (or harm) local communities? This paper reviews a vast literature examining these questions, with an emphasis on empirical works. First, the evidence and theoretical arguments behind the so-called resource curse, and other impacts at the country level, are reviewed. This cross-country literature highlights the importance of institutions. Then, a simple analytical framework is developed to understand how resource booms could impact local communities, and the available empirical evidence is examined. This emerging literature exploits within-country variation and is opening new ways to think about the relation between natural resources and economic development. The main message is that others factors, such as market mechanisms and local spillovers, are also relevant for understanding the impact of resource abundance. Finally, the paper discusses issues related to fiscal decentralization and provides ideas for future research.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s