Resource booms and the energy transition: What can we learn from Dutch economists' response to the discovery of natural gas reserves (1959–1977)?

Abstract

Geopolitical instability and climate change are about to bring about large-scale energy reconfigurations. Recent discoveries of fossil fuel potential echo important historical episodes, starting with the finding of natural gas reserves in the Netherlands in 1959, which gave birth to the notion of Dutch Disease, in reference to the macroeconomic structural readjustments that followed the resource boom. Recently, the economic literature on whether such a boom might be a blessing or a curse for a country has been growing. What has not received attention so far is the attitude of Dutch economists in the 1960s and 1970s and the lessons to be drawn from them in today's economic research. This article explores how they understood the gas boom, how they anticipated its effects, and the role they played in shaping Dutch energy policies. We show that the 1960s were a parenthesis, and that energy optimism has historically been more an exception than a rule. In situ economists correctly anticipated some but not all of the transmission channels of the resource boom. These results are insightful for the 21st century, as they not only allow for historicizing the concept of the resource curse but also provide lessons for macroeconomic policies in the context of the energy transition, especially in countries endowed with fossil fuels and mineral resources.