Resource Accounting in Measures of Unsustainability: Challenging the World Bank's Conclusions

Eric Neumayer

Environmental & Resource Economics, 2000, vol. 15, issue 3, 257-278

Abstract: The World Bank has recently published acomprehensive study of environmental and resourceaccounting, covering 103 countries (World Bank1997a). The study concludes that many Sub-Saharan,Northern African and Middle East countries have hadnegative `genuine' saving rates over the last 20years and therefore fail to pass the test of weaksustainability. This paper argues that the Bank'sconclusions depend on a method for computing usercosts from resource exploitation that is challengedby two competing ones (the `El Serafy'-method andthe method of Repetto et al.) and is inferior to oneof its rivals. Resource rents are re-computed usingthe `El Serafy'-method for 14 countries and theSub-Saharan and Northern African and Middle Eastregions. The results are that both regions andalmost all countries either stop exhibiting signs ofunsustainability or their unsustainability can beexplained without having recourse to resourceaccounting. However, for Congo, Ecuador, Gabon,Nigeria, Mauritania and Trinidad and Tobago there isa lesson: These countries did not adequately use theopportunities they were given through their naturalresource endowments and should learn from theirmistake for the future depletion of their remainingreserves of natural resources. Copyright Kluwer Academic Publishers 2000

Keywords: accounting; `El Serafy'-method; genuine savings; natural resources; pollution; sustainability; World Bank (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (28)

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DOI: 10.1023/A:1008304812545

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