Publication:
Beating the Resource Curse : The Case of Botswana

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Date
2001-10
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Published
2001-10
Author(s)
Jiwanji, Moortaza
Abstract
The endowment of natural resources has often been associated with disappointing economic development. This phenomenon is referred to in the literature as the "resource curse," which hypothesizes that economies experiencing resource booms, either through price increases or new discoveries, will experience unsustainable growth rates. There are various mechanisms through which a resource-boom can negatively impact on an economy. For instance, it can lead to excessive government expenditure during the boom period and drastic cuts when the boom ends; detrimental impacts on non-boom tradable sectors; inefficient investment beyond the absorptive capacity of the country; and rent seeking behavior. By exploring the case of the mineral boom in Botswana, this paper will demonstrate that the resource curse is not necessarily the fate of resource abundant countries. The adoption of sound economic policies and the good management of windfall gains have allowed Botswana to continuously manage growth and to become one of the great success stories of developing countries.
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Jiwanji, Moortaza; Sarraf, Maria. 2001. Beating the Resource Curse : The Case of Botswana. Environment Department working paper;no. 83. Environmental economics series. © World Bank, Washington, DC. http://hdl.handle.net/10986/18304 License: CC BY 3.0 IGO.
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