Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend

Summary This paper considers the proposal that each country distributes its resource rents directly to citizens as a universal and unconditional cash transfer, or Resource Dividend, and estimates its potential impact on global poverty for the years 2000-06. Using a global dataset on resource rents and the distribution of income, I find that if every developing country implemented the policy then the number of people living below $1-a-day would be cut by between 27% and 66%, depending on the year and the assumptions made. Looking ahead, poverty could be better than halved as long as commodity prices do not drop below their 2004 level.