Beating the Resource Curse : The Case of Botswana

Beating the Resource Curse : The Case of Botswana

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,...

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Bibliographic Details
Main Authors:	Sarraf, Maria, Jiwanji, Moortaza
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	DUTCH DISEASE ECONOMIC MANAGEMENT POLITICAL ENVIRONMENT MINING SECTOR NATURAL RESOURCES DEVELOPMENT RESOURCE PLANNING PUBLIC EXPENDITURES EXCHANGE RATES ECONOMIC DIVERSIFICATION ECONOMIC LINKAGES RENT-SEEKING PROFIT MOTIVE ACCOUNTING ADJUSTMENT POLICIES AGRICULTURE ALLOCATION OF LABOR BANK OF BOTSWANA BASE YEAR BORROWING CAPITAL FLIGHT CIVIL SERVICE CLOSED ECONOMIES COAL COMPETITIVENESS CONSENSUS DEBT DECISION MAKING DEPOSITS ECONOMIC CONSEQUENCES ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC PROBLEMS ECONOMIC THEORY EMPIRICAL INVESTIGATIONS EMPLOYMENT ENVIRONMENTAL COSTS ENVIRONMENTAL ECONOMICS ENVIRONMENTAL IMPACTS EXCHANGE RATE EXPANSIONARY FISCAL EXPENDITURE EXPORTS EXTERNALITIES EXTERNALITY FINANCIAL SECTORS FISCAL POLICIES FISCAL POLICY FOREIGN ASSETS FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN INVESTMENT FOREIGN RESERVES FORMAL ANALYSIS FORMAL EMPLOYMENT GDP GNP GNP PER CAPITA GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT'S BUDGET GROSS DOMESTIC PRODUCT GROSS NATIONAL PRODUCT GROWTH POTENTIAL GROWTH RATE HUMAN CAPITAL IMPORTS INCOME INCOME DISTRIBUTION INFLATION INFORMAL SECTOR INTERNATIONAL RESERVES IRREVERSIBILITY LABOR FORCE LEGAL FRAMEWORK MACROECONOMIC POLICY MARKET DISCIPLINE MINES MONETARY AUTHORITIES NATIONS NATURAL RESOURCES OIL PRICE INCREASES PRIVATE SECTOR PRODUCTIVITY PROTECTIONISM PUBLIC SECTOR RECURRENT EXPENDITURES RENT SEEKING RENT SEEKING BEHAVIOR RESOURCE CURSE SAVINGS STREAMS TAXATION TECHNOLOGICAL PROGRESS TOTAL COSTS TOTAL REVENUE TREASURY VALUE ADDED WAGE RATES WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2001/10/1992289/beating-resource-curse-case-botswana http://hdl.handle.net/10986/18304

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Summary:	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.