The extractive industries as a primer for economic growth - getting around the resource curse.

ABSTRACT One of the surprising features of modern economic growth is that economies with abundant natural resources have tended to grow less rapidly than natural resource scarce economies. This paper demonstrates that countries with high levels of natural resource exports tend to grow slower than those countries that have fewer natural resource exports. However, when controlling for the quality of institutions, the effect can be reversed. It is has been found that all countries (regardless of the intensity of natural resource exports) perform better under „good‟ institutions than under „poor‟ institutions. Furthermore, the study examines the determinates of good institutions and finds that high levels of social and human capital are pre-requisites for strong institutions and good governance. The data therefore suggests that high stocks of human and social capital are possible cures to the resource curse. The study further concludes that although resource abundance is linked to slower levels of economic growth, countries should not turn a blind eye to their natural resources. They should however not depend on them too much as the benefits of resource based industrialisation and „forced‟ beneficiation are questioned. The study has implications for policy makers as it recommends that a blank page approach be taken when formulating a development strategy. In terms of institutional reform, the study examines various forms of government in Africa against economic success and finds that African countries perform better under democracies. This finding is likely linked to the mode of manifestation of the resource curse. In Africa, the resource curse seems to specifically manifest itself through the political economy (including systems of political patronage, conflict and security) and not through the effects of macro-economic instability (i.e. Dutch disease). Furthermore, a geographical study of institutions, human capital and economic performance suggests that good performance spills over into adjacent countries, thereby creating a case for increased regionalisation in Africa and recommends more bilateral trade and interdependency of African economies to spread good practices

The Political Economy of Non-Renewable Resource Ownership and Control

A large body of literature finds a negative relationship between natural resource abundance and economic efficiency. With few notable exceptions, this literature does not account for variations in the ownership and control of the resources. Through an analytical interpretation of results from a game-theoretic political economy model, this study examines how economic rents, the opportunity cost of firms, potential cost or market access advantages of the private sector and time preferences of politicians combine to affect a politician’s preferences for ownership and control of a non-renewable resource. I find that the resulting choice of ownership type, public or private, is context-specific and that no generalisations can be made: among other factors politicians will consider the size of the resource, expected price paths, whether the private sector has a cost or market access advantage over the state when making its decision, prices and the degree to which the government holds a non-controlling equity stake in the firm. With respect to the efficiency of public versus private ownership, I find that either model can be efficient and that the result is driven mainly by: (i) the differences in time preferences between politicians, the private sector and the social optimum; and (ii) the degree to which the private sector holds a non-appropriable competitive advantage over the government. The model provides a rich and nuanced interpretation of the incentives governments face in making ownership decisions over non-renewable resources. The results act as a reminder to advisers to take into consideration country specifics when making recommendations to governments about which forms of ownership and control lead to a more efficient outcome. Results are corroborated by observations in empirical literature and the model’s explanatory power is highlighted through a range of country case studies

Visual access to performance indicators in the mining sector

We introduce a visualization system that provides visual interactive access to information relevant for decision making in the mining sector. The mining sector is one of the most important industries in developing countries, especially in Africa. Stakeholders like governments, investors, and the civil society play an important role in the growth of the mining sector. They are interested in information reviewing individual country performances towards mining. The Mining Investment and Governance Review (MInGov) dataset explicitly addresses this issue. However, the complex data structure introduces challenges for the intuitive and easy understanding of the information. Together with mining sector experts, we conducted a design study with the goal to provide visual interactive access to investment- and policy-related information. We report on a domain characterization of the MInGov dataset, its potential users, and their tasks. Based on this analysis, we design a visualization system that supports mining-related decision making. Finally, we evaluate the visualization system in a user workshop with domain experts