Do Resource Windfalls Improve the Standard of Living in Sub-Saharan African Countries?: Evidence from a Panel of Countries

Munseob Lee and Cheikh Gueye

No 2015/083, IMF Working Papers from International Monetary Fund

Abstract: We examine the impact of resource windfall on the standard of living both in the short-run and long-run, using a sample of 130 countries, 1963-2007. Then, we systematically investigate the effect of resource windfall on welfare in three different groups of countries: We find that in the short-run resource windfall is welfare enhancing in the whole sample, especially via increases in income and decreases in inequality. However, in SSA countries, the size of welfare improvement is small and it is smaller and almost zero after one year in fragile Sub-Saharan African (SSA) countries. In the whole sample, a resource windfall shock leads to significant welfare growth even in the long-run, but we couldn’t find any significant long-run effect of resource windfall in SSA countries.

Keywords: WP; SSA country; natural resource; commodity prices; natural resources; inclusive growth; welfare; governance; resource windfall; growth rate; resource governance index; Income distribution; Income inequality; Personal income; Sub-Saharan Africa; Global; Middle East; North Africa; East Africa (search for similar items in EconPapers)
Pages: 38
Date: 2015-04-28
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Citations: View citations in EconPapers (3)

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