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Money to the people: a calculation of direct dividend payments in Africa

Marcelo M. Giugale and Nga Thi Viet Nguyen ()
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Marcelo M. Giugale: World Bank
Nga Thi Viet Nguyen: World Bank

International Economics and Economic Policy, 2018, vol. 15, issue 1, No 1, 19 pages

Abstract: Abstract Historical data shows that large natural resource endowments have not translated into better quality of life in Sub-Saharan Africa (“Africa” for short). The problem is becoming more urgent, as new exploration technologies are rapidly expanding the number of countries whose fiscal revenues will grow, in many cases massively, with new oil, gas and mineral discoveries. A search is on for innovative approaches in managing this commodity bonanza. This paper focuses on the distribution of resource rents as cash transfers to citizens, so-called “Direct Dividend Payments” (DDPs). It expands on recent related literature by calculating such transfers, whether universal or targeted, for every African country for which data is available, and compares them to measures of poverty depth under both national and global definitions. Furthermore, it extends the analysis to a different kind of resource flow enjoyed by most African countries—foreign aid. We found that DDPs can account for a large proportion of the income Africa’s poor need to step over the poverty line.

Keywords: JEL classification; H41; H5; I3; O10; O13; O15; Q3; Africa; Extractive industries; Poverty; Public goods; Cash transfers; Direct dividend payments (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s10368-016-0359-x

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