Abstract
This volume emphasizes instead the notion of 'good fit,' taking the position that welfare-promoting policies, institutions, and governance must be tailored, at least in part, to a country's specific context. In this vein, the volume presents an analytical framework for assessing a country's political economy and institutional environment as it relates to natural resource management and, on that basis, it offers a substantial set of targeted prescriptions across the natural resource value chain that are technically sound and compatible with the identified underlying incentives. In other words, the objective of this book is to help development practitioners unravel the political economy dynamics surrounding natural resource management in order to complement their technically grounded engagement. To this end, the analytical approach has been two-pronged. First, case studies were conducted on the political economy of the hydrocarbon and mineral value chains in 13 countries in the Africa, East Asia and Pacific, and Latin America and the Caribbean regions. Second, in light of this empirical material, the book highlights the current frontier of applied political economy analysis on resource dependence. This volume synthesizes the empirical and the theoretical with an emphasis on illuminating the implications for operational engagement in resource-dependent settings.
Highlights
Beyond the Resource Curse [The business of mining] is perhaps the most disadvantageous lottery in the world, or the one in which the gain of those who draw the prizes bears the least proportion to the loss of those who draw the blanks.— Adam Smith, The Wealth of Nations (1776)Subsoil natural resource endowments and their associated rents—if well harnessed and managed—can be a boon to developing countries
Natural resource rents are most reliably transformed into sustainable development riches when a government can make credible intertemporal commitments to both extractive companies and its own citizens, and when the political regime is inclusive such that the government faces incentives to use resource rents to provide public goods that enhance the collective welfare
Natural resource rents are most reliably transformed into sustainable development riches when a government can make credible intertemporal commitments to both extractive companies and its citizens, and when the political regime is inclusive such that the government faces the incentives to use resource rents to provide public goods that enhance collective welfare
Summary
Beyond the Resource Curse welfare-enhancing goals in three key areas of natural resource management: extraction, taxation, and investment of resource rents. Natural resource rents are most reliably transformed into sustainable development riches when a government can make credible intertemporal commitments to both extractive companies and its own citizens, and when the political regime is inclusive such that the government faces incentives to use resource rents to provide public goods that enhance the collective welfare This typology may be used to characterize a country at a specific time, but countries evolve dynamically, sometimes transforming from one political economy setting to another. In using the NRM value chain as a micro-political economy lens— and having emphasized an understanding of how resource rents flow through the value chain from extraction to taxation to public investment—this book has identified a series of typical natural resource management paradoxes that beset resource-dependent developing countries These paradoxes are listed in box 1.1 to provide an overview of the specific types of challenges the volume identifies and addresses. For committed domestic reformers and their development partners, the authors hope that this book will provide a practical resource for engaging more smartly by elaborating better-fit interventions, thereby helping countries to navigate the prospective road from resource rents to sustainable development riches
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