Publication: Responding to the Challenge of Fragility and Security in West Africa: Natural Resources, Extractive Industry Investment, and Social Conflict
Loading...
Published
2015
ISSN
Date
2015-08-19
Editor(s)
Abstract
The inability to unlock natural resource wealth for the benefit of developing countries’ local populations, a phenomenon popularly known as the ‘resource curse’ or the ‘paradox of plenty’, has spawned extensive debate among researchers and policy makers in recent years. There is now a well-established body of literature exploring the links between natural resources and conflict, with some sources estimating that over the past 60 years, 40 percent of civil wars have been associated with natural resources. Following this introduction, Section two provides an overview of interstate tensions in West Africa in order to improve understanding of the drivers of fragility that trigger conflict between countries around extractive industry investment. Here, the discussion is grounded in examples in which interstate tensions have been apparent, including the case of the Mano River Union, Cote d’Ivoire, Guinea, Liberia, and Sierra Leone, a region with a history of conflict, and where the exploitation of commercial deposits of high-value resources may continue to have a potentially destabilizing effect. Section three focuses on the decentralization of natural resource revenues, a process that proponents believe can help manage grievances and defuse intrastate tension in areas directly affected by resource extraction, but one that is also not without challenges. Drawing upon the case of Ghana’s Mineral Development Fund, the section explores the potential for conflict (and conflict triggers) to arise when the redistribution of extractive industry revenues to subnational regions takes place. In doing so, it becomes apparent that the capture and misuse of revenues from the fund is as much a political issue as it is a policy or technical one. This sets the stage for section four, which focuses in greater detail on extractive industry-related conflict within catchment communities, and how contestation is most often a result of unequal power relationships. Section five, the conclusion, summarizes and reflects upon some of the challenges and struggles over resource management associated with West Africa’s recent resource boom, and draws out some of the cross-cutting themes. Here, suitable entry points for future lines of inquiry and engagement are identified.
Link to Data Set
Citation
“Maconachie, Roy; Srinivasan, Radhika; Menzies, Nicholas. 2015. Responding to the Challenge of Fragility and Security in West Africa: Natural Resources, Extractive Industry Investment, and Social Conflict. © World Bank. http://hdl.handle.net/10986/22511 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Political Economy of Extractives Governance in Sierra Leone(World Bank, Washington, DC, 2013-07)Sierra Leone is still recovering from a brutal civil war (1991-2002), fuelled in part by a valuable and easily extractable natural resource (diamonds). Sierra Leone now stands on the verge of an unprecedented period of economic growth, driven primarily by revenues from large-scale iron ore mining. Yet it continues to face many governance and developmental challenges. The rapid rise of the extractives governance agenda in Sierra Leone requires an equally swift, yet strategic response from all stakeholders: the Government of Sierra Leone (GoSL), development partners (DPs), civil society organizations (CSOs), communities, and mining companies. This report uses a 'value chain' approach to mining governance which highlights the critical stages through which a resource dependent country is expected to progress as it seeks to transform resource rents into economic growth and sustainable human development. The objective of this study is ultimately to improve the management of the natural resource endowment, enjoyed by Sierra Leone, in a manner that will allow the revenues generated from natural resource extraction to contribute in an optimal manner towards sustainable economic growth. Specifically, the study focuses on mining (iron ore, diamonds, and other minerals) and to a much lesser extent, oil and gas. By using the 'theories of change' approach to political economy analysis, the report looks at the historical challenges around extractive governance, identifies systemic features, and characteristics of 'the problem', extrapolates and analyses the incentives shaping the activities and behaviors of key stakeholders, and then lays out a possible platform for engagement based on clearly identified entry points. This report is organized as follows: chapter one is introduction, chapter two presents a summary of previous analytical work on the political economy of Sierra Leone with special reference to the extractives sector, its governance past, and possible governance futures. Chapter three undertakes an in-depth analysis of the extractives value chain in Sierra Leone and chapter four identifies key stakeholders across this value chain, noting their influence on extractives management policy and implementation, their potential relationships with other stakeholders, and influence over policy outcomes. Chapter five identifies and highlights suitable entry points for policy dialogue on extractives-led governance in Sierra Leone and possible project and technical assistance interventions across the value chain.Publication Evaluation of the World Bank Group's Activities in the Extractive Industries : Factoring in Governance(World Bank, Washington, DC, 2004-09-01)This paper examines the links between governance and the Extractive Industries sector, and considers the implications of those links for the work of the World Bank. This evaluation takes place on the heels of important complementary World Bank initiatives, upon which it draws. The Bank has pioneered a research initiative into the economics of civil war crime and violence, which considered inter alia the effects of natural resource endowments. A task force has examined the special problems of Low Income Countries Under Stress. There is overlap between this group of countries and the group of resource-rich Bank borrowers. And the Bank has done substantial research linking governance to development outcomes.Publication Political Economy of the Mining Sector in Ghana(2011-07-01)With a focus on the institutional set-up and the political environment as central to understanding and rectifying the poor impact of mining on Ghana's economic development, this paper highlights the vulnerabilities in mining sector governance along the industry value chain. The authors explain why it has been difficult to implement policies that would have improved social welfare. They find that incentive problems in institutions directly or peripherally involved in mining governance are a major factor, as are an excessively centralized policy-making process, a powerful executive president, strong party loyalty, a system of political patronage, lack of transparency, and weak institutional capacity at the political and regulatory levels. The paper argues that the net impact of mining on economic development is likely to be enhanced with appropriate reforms in governance. Most importantly, there should be a greater awareness of incentive problems at the political level and their possible implications for sector performance and the economy at large. The set of checks and balances, as stipulated by the Constitution, have to be reinforced. Furthermore, capacity building at different levels and institutions is needed and should be combined with efforts to enhance incentives for institutional performance.Publication Community Driven Development and Accountable Local Governance : Some Lessons from the Philippines(Washington, DC, 2009-10-15)This study evaluates the connections between community-driven development (CDD) and decentralized local governance, and the need to identify strategies for operational integration. It aims to deepen the understanding of how the institutional environment for local governance interacts with CDD project operations. It gives special emphasis on the issue of accountability, analyzing how CDD operations perform in terms of strengthening the capacity of citizens and civil society to hold local authorities and public service providers accountable, and the capacity of the local government to be held accountable. The study utilizes a two-pronged approach. First, it assesses the institutional environment for accountability in local governance. Second, it examines the operations of two major World Bank-assisted CDD projects in two municipal case study sites. Given that CDD projects both shape and are shaped by local governance contexts in which they are embedded, the study investigates how CDD operations in the Philippines are affected by and are helping reform local governance conditions. It is from the analysis of this interface between CDD operations and local governance conditions that the study aims to generate policy and operational recommendations to enhance integration between CDD and local governance approaches. The analysis of the institutional environment for accountability in local governance often found an enabling policy and legal framework in principle, but severely limiting constraints in practice.Publication Political Economy of the Petroleum Sector in Nigeria(2011-08-01)The relatively slow pace of Nigeria's development has often been attributed to the phenomenon of the resource curse whereby the nature of the state as a "rentier" dilutes accountability for development and political actors are able to manipulate institutions to sustain poor governance. The impact of the political elite's resource-control and allocation of revenues on core democratic mechanisms is central to understand the obstacles to development and governance failure. Given that problems of petroleum sector governance are extremely entrenched in Nigeria, the key question is whether and how it is possible to get out of a poor equilibrium after fifty years of oil production. This paper uses a political economy perspective to analyze the governance weaknesses along the petroleum sector value chain and attempts to establish the links between challenges in sector regulation and the following major political and economic attributes: (i) strong executive control on petroleum governance in a political environment of weak checks and balances; (ii) regulatory and operating roles bundled into one institution, thereby creating conflict of interest; and (iii) manipulation of elections and political appointments. The restoration of democratic government has helped improve transparency and management of oil revenue and reforms at the federal level and proposed reforms of the petroleum sector hold much promise. At the same time, the judiciary has started to restore confidence that it will serve as a check and balance on the executive and the electoral process. Yet, these reforms are fragile and need to be deepened and institutionalized. They must be addressed not as purely technocratic matters but as issues of political economy and vested interests that must, through regulation and reform, be aligned with the public interest and a vision of Nigerian development.
Users also downloaded
Showing related downloaded files
Publication Democratic Republic of Congo Jobs Diagnostic(World Bank, Washington, DC, 2018-02)The economy of the Democratic Republic of Congo is not creating sufficient jobs for its young and rapidly growing workforce. Although the Congolese economy has experienced fast growth and poverty has declined, further reducing poverty will require more dynamic job creation and continued reductions in fertility rates. The current youth bulge and potential demographic dividend will open a unique window of opportunity but will demand faster job creation. The challenge is not limited to reducing unemployment, but includes tackling inactivity and rampant underemployment. Possible avenues to address labor market shortcomings include removing obstacles and resolving market failures for firms to grow, integrating agribusinesses into value chains, facilitating urbanization, and focusing on skills, not just schooling. At the same time, a focus on productivity growth could strengthen its link to employment creation. The report, Democratic Republic of Congo: jobs diagnostic, analyzes the main challenges - at the macro, firm, and household levels - that the country faces in creating jobs. It also outlines the main obstacles to creating more and better jobs that are more inclusive of women and youth.Publication Fiscal Policy and Economic Growth : Lessons for Eastern Europe and Central Asia(Washington, DC: World Bank, 2007)This study explores public finance policies in the transition countries of Europe and Central Asia (ECA) and their likely effects on economic growth. The analysis is organized in three parts. Part one reviews public finance systems across the ECA region with regard to overall size, structure of expenditures and revenues, and patterns of fiscal adjustment over time. It compares these patterns and trends in ECA countries against those in fast-growing economies in other regions, and it explores possible relationships between these public finance variables and rates of economic growth. Part two undertakes detailed analysis of public expenditures policies in four major areas: infrastructure, education, health, and pensions. Part three turns to the revenue side of the budget and looks in detail at two issues of particular importance in current policy debates: the impact of flat income tax reforms and the level and structure of taxes on labor.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Special Economic Zones(World Bank, Washington, DC, 2017)Policy-makers across developing economies are implementing different forms of special economic zones (SEZs): programs intended to catalyze economic growth. The SEZ program is aimed at attracting foreign direct investment (FDI) to increase firm-level investment and improve firm-level productivity by enhancing firm-level coordination, networks, and innovation. The purpose of this operational review is to inform and to identify and document lessons from the application of these policies across countries and across the World Bank’s project portfolio. The report reviews the SEZ programs, and the characteristics and contexts that are associated with the success of SEZ policies. The report also adds to the general SEZ debate of whether the benefits generated by SEZs are restricted to the firms within the walls of the SEZs with limited social benefit; or whether SEZs eventually lead to spillovers that support structural change generating high social benefits. The report is structure as follows: chapter one gives introduction. Chapter two, provides a brief literature review of SEZ theory and performance. Chapter three provides an overview of the dataset developed for this work. Chapter four presents the econometric estimation using the dataset (for the explanatory variables) and nighttime lights data over 5 years as a measure of success (and dependent variable). Finally, chapter five focuses on the World-Bank-Group-funded projects that contain an SEZ component and assess the factors determining success and failures of SEZs.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.