Escaping the Resource Curse / Edition 1by Macartan Humphreys, Jeffrey D. Sachs, Joseph E. Stiglitz
Pub. Date: 05/15/2007
Publisher: Columbia University Press
The wealth derived from natural resources can have a tremendous impact on the economics and politics of producing countries. In the last quarter century, we have seen the surprising and sobering consequences of this wealth, producing what is now known as the "resource curse." Countries with large endowments of natural resources, such as oil and gas, often do worse
The wealth derived from natural resources can have a tremendous impact on the economics and politics of producing countries. In the last quarter century, we have seen the surprising and sobering consequences of this wealth, producing what is now known as the "resource curse." Countries with large endowments of natural resources, such as oil and gas, often do worse than their poorer neighbors. Their resource wealth frequently leads to lower growth rates, greater volatility, more corruption, and, in extreme cases, devastating civil wars.
In this volume, leading economists, lawyers, and political scientists address the fundamental channels generated by this wealth and examine the major decisions a country must make when faced with an abundance of a natural resource. They identify such problems as asymmetric bargaining power, limited access to information, the failure to engage in long-term planning, weak institutional structures, and missing mechanisms of accountability. They also provide a series of solutions, including recommendations for contracting with oil companies and allocating revenue; guidelines for negotiators; models for optimal auctions; and strategies to strengthen state-society linkages and public accountability.
The contributors show that solutions to the resource curse do exist; yet, institutional innovations are necessary to align the incentives of key domestic and international actors, and this requires fundamental political changes and much greater levels of transparency than currently exist. It is becoming increasingly clear that past policies have not provided the benefits they promised. Escaping the Resource Curse lays out a path for radically improving the management of the world's natural resources.
Table of Contents
Foreword, by George SorosAcknowledgments1. Introduction: What Is the Problem with Natural Resource Wealth?, by Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. StiglitzPart I: Dealing with Oil Corporations2. What Is the Role of the State?, by Joseph E. Stiglitz3. How to Evaluate the Fiscal Terms of Oil Contracts, by David Johnston4. How to Negotiate an Oil Agreement, by Jenik Radon5. How Best to Auction Oil Rights, by Peter CramtonPart II: Managing the Macroeconomy 6. Are Oil Producers Rich?, by Geoffrey Heal7. How to Handle the Macroeconomics of Oil Wealth, by Jeffrey D. Sachs8. The Political Economy of Natural Resource Funds, by Macartan Humphreys and Martin E. SandbuPart III: Handling the Politics 9. How Mineral-Rich States Can Reduce Inequality, by Michael L. Ross10. Ensuring Fairness: The Case for a Transparent Fiscal Social Contract, by Terry Lynn Karl11. Critical Issues for a Revenue Management Law, by Joseph C. Bell and Teresa Maurea Faria12. Future Directions for the Management of Natural Resources, by Macartan Humphreys, Jeffrey D. Sachs, andJoseph E. StiglitzAppendices1. Abridged Sao Tome and Principe Oil Law2. Abridged Timor-Leste Oil Law3. Glossary of Oil Terms4. Web Site ReferencesContributorsIndex
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