Resources and Incentives to Reform: A Model and Some Evidence on Sub-Saharan African Countries

Guido de Blasio and A. Dalmazzo

No 2001/086, IMF Working Papers from International Monetary Fund

Abstract: The paper models the incentives for a self-interested government to implement "good policies". While good policies lead to investment and growth, they reduce the government's ability to increase supporters' consumption. The model predicts that resource abundance is conductive to poor policies and, consequently, to low investment. The implications of the model are broadly supported by evidence on sub-Saharan African countries. In particular, countries that are rich in natural resources tend to have lower institutional quality and worse macroeconomic and trade policies.

Keywords: WP; mover accent; Investment; autocracy; reforms; incumbent government; B. government benevolence; ruling elite; governance quality; elitist government; Infrastructure; Natural resources; Private investment; Public investment and public-private partnerships (PPP); Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 43
Date: 2001-06-01
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Citations: View citations in EconPapers (5)

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