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Money to the people: a calculation of direct dividend payments in Africa

Author

Listed:
  • Marcelo M. Giugale

    (World Bank)

  • Nga Thi Viet Nguyen

    (World Bank)

Abstract

Historical data shows that large natural resource endowments have not translated into better quality of life in Sub-Saharan Africa (“Africa” for short). The problem is becoming more urgent, as new exploration technologies are rapidly expanding the number of countries whose fiscal revenues will grow, in many cases massively, with new oil, gas and mineral discoveries. A search is on for innovative approaches in managing this commodity bonanza. This paper focuses on the distribution of resource rents as cash transfers to citizens, so-called “Direct Dividend Payments” (DDPs). It expands on recent related literature by calculating such transfers, whether universal or targeted, for every African country for which data is available, and compares them to measures of poverty depth under both national and global definitions. Furthermore, it extends the analysis to a different kind of resource flow enjoyed by most African countries—foreign aid. We found that DDPs can account for a large proportion of the income Africa’s poor need to step over the poverty line.

Suggested Citation

  • Marcelo M. Giugale & Nga Thi Viet Nguyen, 2018. "Money to the people: a calculation of direct dividend payments in Africa," International Economics and Economic Policy, Springer, vol. 15(1), pages 1-19, January.
    • Handle: RePEc:kap:iecepo:v:15:y:2018:i:1:d:10.1007_s10368-016-0359-x
    DOI: 10.1007/s10368-016-0359-x
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    References listed on IDEAS

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    1. Shantayanan Devarajan & Marcelo Giugale, 2013. "The Case for Direct Transfers of Resource Revenues in Africa - Working Paper 333," Working Papers 333, Center for Global Development.
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    4. Shantayanan Devarajan, Hélène Ehrhart, Tuan Minh Le, Gaël Raballan, 2011. "Direct Redistribution, Taxation, and Accountability in Oil-Rich Economies- A Proposal- Working Paper 281," Working Papers 281, Center for Global Development.
    5. Mr. Alan H. Gelb & Mr. Arnaud Dupuy & Mr. Rabah Arezki, 2012. "Resource Windfalls, Optimal Public Investment and Redistribution: The Role of Total Factor Productivity and Administrative Capacity," IMF Working Papers 2012/200, International Monetary Fund.
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    Cited by:

    1. Devarajan, Shantayanan & Do, Quy-Toan, 2023. "Taxation, accountability, and cash transfers: Breaking the resource curse," Journal of Public Economics, Elsevier, vol. 218(C).

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    More about this item

    Keywords

    JEL classification; H41; H5; I3; O10; O13; O15; Q3;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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