Aid and Rent-Driven Growth: Mauritania, Kenya and Mozambique Compared

This paper conceptualises foreign aid as a geopolitical form of rent in order to help distinguish the conditions under which aid is detrimental to sustained economic recovery from those where it is beneficial. Foreign aid shares with natural resource rent and contrived (i.e., government monopoly) rent the property of being a large revenue stream that is detached from the economic activity that generates it, and elicits political contests for its capture. Rent-driven models suggest such contests have two adverse effects: (i) they deflect government incentives into rent-channelling at the expense of promoting wealth creation; and (ii) the resulting political allocation of the rent distorts the economy and precipitates a growth collapse, which is protracted. In this context, the three principal causes of aid failure identified in the literature (corruption, a poor policy environment and Dutch disease effects) are all symptoms of the destabilizing impact of rent streams on immature political economies. Consequently, the deployment of foreign aid to revive collapsed economies runs the risk of perpetuating rent-seeking and thereby postponing essential economic restructuring. This paper compares the varied impacts of aid on the development trajectories of Mauritania, Kenya and Mozambique. It argues ...Africa, aid, rent, resource curse, economic development

Patterns of Rent-Extraction and Deployment in Developing Countries: Implications for Governance, Economic Policy and Performance

natural resources, government incentives, development trajectory

Natural Resources, Development Models and Sustainable Development

This paper starts out from the optimistic assumption that the basic policies for environmental economic development are known but uncertainties surround the speed of their adoption. In many developing countries the key obstacle is poor governance: consequently, renewable resources continue to be mined, non-renewable resources are depleted irresponsibly, and reductions in pollution intensity lag. Recent research identifies resource abundance as an important cause of policy failure. This is because the primary sector remains large in relation to GDP so that differences in the scale of natural resource rents (and in their socio-economic linkages) condition macro policy in important ways. Most developing countries are resource-rich, a condition that engenders predatory political states that deploy resource rents in ways that cumulatively distort the economy so it falls into a staple trap, which undermines economic growth and environmentally sustainable policies. Sound macroeconomic policy is critical to the success of microeconomic measures like much of environmental policy, a fact often neglected by environmental reformers. There are two implications of this. First, in the long term, improved governance will enhance environmentally sustainable management of: renewable resources (by taking account of the total economic value of resources); finite resources (guided by the need to maintain genuine saving); and the global pollution sinks (by flattening the environmental Kuznets curve). Second, until such improvements occur, environmental policies are likely to underperform unless they are adapted to take account of flawed macro policies. Environmental reformers therefore need to support efforts by the international financial institutions to improve macroeconomic management.Environmental Economics and Policy, International Development, Resource /Energy Economics and Policy,

The Resource Curse and Rentier States in the Caspian Region : A Need for Context Analysis

Although much attention is paid to the Caspian region with regard to energy issues, the domestic consequences of the region’s resource production have so far constituted a neglected field of research. A systematic survey of the latest research trends in the economic and political causalities of the resource curse and of rentier states reveals that there is a need for context analysis. In reference to this, the paper traces any shortcomings and promising approaches in the existent body of literature on the Caspian region. Following on from this, the paper then proposes a new approach; specifically, one in which any differences and similarities in the context conditions are captured. This enables a more precise exploration of the exact ways in which they form contemporary post-Soviet Caspian rentier states.Obwohl der Region am Kaspischen Meer im Zuge von Energiediskursen große Aufmerksamkeit zuteil wird, stellen die innerstaatlichen Folgen der Ressourcenproduktion in der Region ein bislang vernachlässigtes Forschungsfeld dar. Ein systematischer Überblick über die jüngsten Forschungstrends zu wirtschaftlichen und politischen Kausalzusammenhängen des Ressourcenfluchs und zu Rentierstaaten offenbart die Notwendigkeit von Kontextanalysen. Hierauf Bezug nehmend, analysiert der Aufsatz sowohl die Mängel als auch viel versprechende Ansätze in der betreffenden Literatur zur Region am Kaspischen Meer. Der Aufsatz stellt letztendlich einen neuen Ansatz vor, der Unterschiede und Gemeinsamkeiten in den Kontextbedingungen erfasst, um zu erforschen, wie diese die gegenwärtigen post-sowjetischen Rentierstaaten in der Region am Kaspischen Meer tatsächlich prägen