Author Name Variants
Cust, James (ed.)
Fields of Specialization
Macroeconomics of natural resources, Climate and sustainable development
Externally Hosted Work
Last updated December 5, 2023
James (Jim) Cust is a Senior Economist in the Office of the Chief Economist, Africa Region of the World Bank. His work focuses on the macroeconomics of natural resources, climate and sustainable development. He led the World Bank’s Changing Wealth of Nations program and a recent flagship study on Africa’s Resource Future and the low carbon transition. He also convenes a network of African chief economic advisors to 40 African presidents as part of the CEoG initiative that he co-founded. His worked has been published widely in academic journals such as the Journal of the European Economic Association, Energy Economics and Climate Policy among others, as well as his work being covered in the press such as The Economist, Nature, Reuters and the IMF’s Finance and Development, among others. He previously worked as Director of Research at the Natural Resource Governance Institute, and before that he co-founded the Natural Resource Charter.
Publication Search Results
Now showing 1 - 7 of 7
Publication(World Bank, Washington, DC, 2020-12-15) Galeazzi, Clara ; Steinbuks, Jevgenijs ; Cust, James ; Cust, JamesSub-Saharan Africa has vast non-fuel mineral resources that in some countries constitute major shares of their gross domestic product. The region also contains large oil and natural gas resources, which have been reliable sources of revenue for decades. The region as a whole may be able to prosper from the global shift from oil and gas to renewable energy, but individual countries will feel the impact of the shift in different ways. To predict how these impacts may be felt - and what can be done to strengthen opportunities for export - estimates of trade elasticities of hydrocarbons and nonhydrocarbon metals and minerals provide a valuable guide.
Publication(World Bank, Washington, DC, 2022-02) Mihalyi, David ; Hwang, Jyhjong ; Rivetti, Diego ; Cust, James ; Cust, JamesThis paper investigates the characteristics of resource-backed lending across Sub-Saharan Africa. To shed light on this type of lending, the paper presents new information on 30 resource-backed loans between 2004 and 2018, identified through publicly available information. These loans were concentrated in a few countries, where they represented a sizable fraction of all borrowing and were typically taken by central governments and state-owned enterprises. Although the loan terms are mostly opaque, where data are available, the study finds that such loans are not cheaper than regular loans. The paper highlights opportunities to transparency and offers some suggestions for improving the governance of collateralized borrowings across developing countries.
Publication(World Bank, Washington, DC, 2020-08) Cust, James ; Mensah, Justice Tei ; Cust, JamesMajor oil and gas discoveries are often associated with excitement and jubilation among citizens and government officials. But the extent to which discoveries substantially alter citizen expectations about economic conditions in a country remains an open question. The paper combines Afrobarometer data on household expectations on economic conditions and living standards with the announcement of oil and gas discoveries in Africa to estimate the effect of discoveries on expectations. The identification strategy exploits plausibly exogenous variation in the timing of discoveries relative to the rollout of survey interviews. The study find that discoveries increase expectations of better economic conditions and living standards by 35 and 52 percent respectively. Further, the paper finds that the overall expectations boom effect pertains only to countries with weaker institutions. The paper also provides evidence that households incorporate these expectations into their migration and fertility decisions, with fewer applications in the short run to the U.S. green card lottery and increased childbirth following discovery announcements.
Publication(Washington, DC: World Bank, 2021) Mihalyi, David ; Hwang, Jyhjong ; Rivetti, Diego ; Cust, JamesThis paper investigates the characteristics of resource-backed lending across sub-Saharan Africa. To shed light on this type of lending, the paper presents new information on thirty resource-backed loans identified through publicly available information between 2004-2018. These loans are concentrated in a few countries, where they represent a sizable fraction of all borrowing, they are typically taken by central governments and state-owned enterprises. While loan terms are mostly opaque, where data is available, we find that such loans are not cheaper than regular loans. The authors highlight opportunities to improve transparency and offer some suggestions for improving the governance of collateralized borrowings across developing countries.
Africa’s Resource Future: Harnessing Natural Resources for Economic Transformation during the Low-Carbon Transition(Washington DC : World Bank, 2023-04-03) Cust, James ; Zeufack, Albert G.This book examines the role for natural resource wealth in driving Africa’s economic transformation and the implications of the low-carbon transition for resource-rich economies. Resource wealth remains central to most Sub-Saharan African economies, and significant untapped potential is in the ground. Subsoil assets—such as metals, minerals, oil, and gas—are key sources of government revenues, export earnings, and development potential in most countries in the Africa region. Despite large reserves, success in converting subsoil wealth into aboveground sustainable prosperity has been limited. Since the decline in commodity prices in 2014, resource-rich Africa has grown more slowly than the region’s average growth rate. Finding ways to more effectively harness natural resource wealth to drive economic transformation will be central to Africa’s economic future. As the world moves away from fossil fuels in alignment with commitments under the Paris Agreement, Africa’s resource-rich countries face new risks and opportunities. Recent estimates suggest that 80 percent of the world’s proven fossil fuel reserves must remain underground to meet the Paris targets, and much of these stranded reserves may be in Africa. This issue of stranded assets and, relatedly, “stranded nations,” has major implications for the many African economies that are dependent on petroleum extraction and export. On the other hand, the energy transition will increase demand for raw material inputs involved in clean energy technologies. The transition from fossil fuels to clean energy may create demand by 2050 for 3 billion tons of minerals and metals that are needed to deploy solar, wind, and geothermal energy. How can African economies tap into these opportunities while managing the downside risk to their fossil fuel wealth? "Africa’s Resource Future" explores these themes and offers policy makers insights to help them navigate the coming years of uncertainty.
Publication(World Bank, Washington, DC, 2017-07) Cust, James ; Mihalyi, David ; Cust, JamesOil discoveries can constitute a major positive and exogenous shock to economic activity, but the resource curse hypothesis would suggest they might also be detrimental to growth over the long run. This paper utilizes a new methodology for estimating growth underperformance to examine the extent to which discoveries depress the growth path of a country following a discovery and prior to production starting. The study finds causal evidence of a significant negative effect on short-run growth and growth relative to counterfactual forecast growth in countries with weak institutions, creating growth disappointments prior to private and public resource windfalls. This effect is termed the presource curse. For a giant oil or gas discovery in 1988-2010, the study estimates an average growth disappointment effect of 0.83 percentage points, measured as the average annual gap between forecast and actual growth over the five years following a discovery. Further, the estimated effect varies by the size of the discovery, increasing to a 1.77 percentage points gap in the case of super giant discoveries. The estimated effect is inversely related to the quality of political institutions, and driven by countries with lower institutional quality at the time of the discovery, consistent with the similar long-run results documented in the resource curse literature. For countries with below-threshold institutional quality, the growth disappointment effect is larger, measured as 1.35 percentage points in annual terms. There is no measured growth disappointment effect for countries with strong institutions. Using the synthetic control method, we confirm our findings for a selection of countries above and below the institutional quality threshold. The findings suggest that studies of the resource curse that focus only on the effects of resource exploitation or examine only long-run growth effects may overlook important short-run growth disappointments following discoveries, and the way countries respond to news shocks.
Publication(World Bank, Washington, DC, 2023-12-05) Cust, James ; Collier, Paul ; Rivera-Ballesteros, AlexisAre global incomes converging or diverging Despite recent empirical evidence supporting the hypothesis of unconditional beta convergence, this paper argues that such findings overlook the stark reality facing the world’s poorest people. Many lower income countries, including those among the so-called “Bottom Billion,” continue to slip further behind the rest of the world, while the numbers of those living in extreme poverty are beginning to rise again after decades of decline. The paper explores how these contradictions can coexist and discusses the policy importance of looking beyond global average trends. The paper identifies three confusions that can arise when analyzing trends in income convergence. First, a focus on unconditional convergence can overlook important policy questions, such as whether countries are likely to eradicate extreme poverty or to catch up with the rest of the world. Tests for convergence may yield only partial answers, especially in light of recent findings that show that unconditional beta convergence can coexist with a significant group of countries slipping ever further behind the rest of the world. Meanwhile extreme poverty numbers are increasing rather than decreasing. Second, average trends can both obscure and be distorted by underlying differences in country composition. In the extreme case, while fast-growing China was below global mean incomes between 2000 and 2020, it significantly boosted empirical support for global convergence. Now that China has passed this threshold, the finding will likely reverse in the coming years as more data is available. Third, different levels of availability of time periods and country coverage can distort and even bias empirical findings, especially where limitations to data availability is correlated with lower income or diverging economies.