Natural resources, capital accumulation and the resource curse

EC O L O G IC A L E C O N O M IC S 6 1 ( 2 0 07 ) 62 7 –6 34

a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m

w w w. e l s e v i e r. c o m / l o c a t e / e c o l e c o n

Natural resources, capital accumulation and the resource curse☆
Richard M. Auty⁎
Department of Geography, Lancaster University, Lancaster LA1 4YB UK

AR TIC LE I N FO

ABS TR ACT

Article history:

Early concern by economists for the effect of natural capital on economic growth gave way

Available online 17 October 2006

to complacency and neglect during the nineteenth century. Evidence has emerged, however, that since the 1960s the economic performance of low-income countries has been inversely related to their natural resource wealth. This relationship is not a

Keywords:

deterministic one so policy counts. SEEA can help improve the policy and performance of

Development

resource-abundant low-income countries by reinforcing the rationale for the sound

Environmental accounting

management of natural resources and also by providing an index of policy sustainability

Natural resource rent

in the form of the net saving rate. This policy index, along with other measures such as a

Net saving index

capital fund for sterilizing the rent, initiatives to increase the transparency of rent flows and the rigorous evaluation of alternative uses of additional public sector revenue can improve the efficiency by which natural resource rent is transformed into alternative forms of capital to sustain rising social welfare. Chad and Mauritania provide case studies to illustrate how
SEEA and net saving can be used to diagnose policy failure and improve economic performance. © 2006 Elsevier B.V. All rights reserved.

1.
The neglect of natural resources in models of economic growth
Although classical economists voiced concern in the earlynineteenth century that natural resources, notably land, might constitute a limit to per capita GDP

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