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From fiscal stabilization to economic diversification: A developmental approach to managing resource revenues

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  • Ha-Joon Chang
  • Amir Lebdioui

Abstract

The management of revenues from exhaustible natural resources involves a number of challenges. In this paper, we argue that the standard policy advice to managers of resource revenues has been dominated by short-termism and the lack of a perspective on economic development and structural transformation. As a result, mainstream approaches have often addressed only the symptoms of commodity dependence (e.g. vulnerability to commodity price volatility) rather than its root causes (insufficiently diversified productive structures).

Suggested Citation

  • Ha-Joon Chang & Amir Lebdioui, 2020. "From fiscal stabilization to economic diversification: A developmental approach to managing resource revenues," WIDER Working Paper Series wp-2020-108, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-108
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    Cited by:

    1. Gabriel Porcile & Gilberto Tadeu Lima, 2023. "Rentiers, Strategic Public Goods and Financialization in the Periphery," Working Papers, Department of Economics 2023_03, University of São Paulo (FEA-USP).
    2. Alberto Botta & Giuliano Toshiro Yajima & Gabriel Porcile, 2023. "Structural change, productive development, and capital flows: does financial “bonanza” cause premature deindustrialization?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(2), pages 433-473.
    3. Lebdioui, Amir, 2021. "The Multidimensional Indicator of Extractives-based Development (MINDEX): A new approach to measuring resource wealth and dependence," World Development, Elsevier, vol. 147(C).
    4. Cristina Oneț & Dana Georgeta Alexandru, 2023. "Revenues Sharing in Mineral Exploration: Local Authorities’ Incentives towards Economic Diversification in Romania," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    5. Fitsum Semere Weldegiorgis & Evelyn Dietsche & Shabbir Ahmad, 2023. "Inter-Sectoral Economic Linkages in the Mining Industries of Botswana and Tanzania: Analysis Using Partial Hypothetical Extraction Method," Resources, MDPI, vol. 12(7), pages 1-26, June.
    6. Botta, Alberto & Spinola, Danilo & Yajima, Giuliano & Porcile, Gabriel, 2023. "Pasinetti, Debt Sustainability and (Green) Structural Change at the Time of Global Finance: An Emerging and Developing Countries’ Perspective," CAFE Working Papers 25, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    7. Carrington, Sarah J. & Herrero Olarte, Susana & Urbina, Gabriel, 2023. "Commodity cycle management in Latin America: The importance of resilience in face of vulnerability," Resources Policy, Elsevier, vol. 81(C).
    8. Heim, Irina & Kalyuzhnova, Yelena & Ghobadian, Abby, 2023. "Win-win strategies for firms operating in resource-abundant countries: Technological spillovers and a collaborative diversification policy," Resources Policy, Elsevier, vol. 83(C).

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    Keywords

    Commodity dependence; Economic development; Natural resources; Resource revenue management; Structural transformation; Economic diversification; Fiscal policy;
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