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Beating the resource curse : the case of Botswana (English)

The endowment of natural resources has often been associated with disappointing economic development. This phenomenon is referred to in the literature as the "resource curse," which hypothesizes that economies experiencing resource booms, either through price increases or new discoveries, will experience unsustainable growth rates. There are various mechanisms through which a resource-boom can negatively impact on an economy. For instance, it can lead to excessive government expenditure during the boom period and drastic cuts when the boom ends; detrimental impacts on non-boom tradable sectors; inefficient investment beyond the absorptive capacity of the country; and rent seeking behavior. By exploring the case of the mineral boom in Botswana, this paper will demonstrate that the resource curse is not necessarily the fate of resource abundant countries. The adoption of sound economic policies and the good management of windfall gains have allowed Botswana to continuously manage growth and to become one of the great success stories of developing countries.


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    Sarraf, Maria Jiwanji, Moortaza

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    Departmental Working Paper

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    Beating the resource curse : the case of Botswana

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    Resource Curse;manufacturing sector;raw materials for production;pupil to teacher ratio;life expectancy at birth;social rate of return;increase in government expenditure;windfall gain;real exchange rate;agricultural sector;tradable sector;dutch disease;Foreign Exchange Reserve;Exchange Rates;movement of labor;share of income;formal sector employment;import of goods;government revenue;export boom;Economic Policy;rent seeking;employment in agriculture;gnp per capita;protectionist trade policy;efficiency of investment;long term growth;exchange rate management;infant mortality rate;rent seeking behavior;balance of payment;current account deficit;pattern of behavior;total labor force;informal sector employment;allocation of labor;Demand For Education;natural resource sector;estimates of income;Natural Resource Wealth;import substitution strategy;nominal exchange rate;accumulation of savings;natural resource rent;newly industrializing country;industrial policy reform;foreign exchange inflow;incidence of hiv;number of jobs;impact of mine;savings and investment;increase in expenditure;Sustainable Economic Development;expansionary fiscal policy;international financial statistic;wages and salary;package of policy;prime lending rate;share of export;education and health;Natural Resources;Economic Management;economic diversification;Mining;international reserve;policy suggestions;tradable good;export earning;export earnings;gini index;formal employment;diamond mine;skill accumulation;absorptive capacity;common problems;mineral boom;water pollution;rural resource;diamond mining;relative price;Trade Policies;rent seeker;household income;political pressure;mineral economy;export sector;foreign asset;government's budget;expenditure survey;resources policy;primary sector;income economy;land area;real appreciation;political dimensions;mineral revenue;primary goods;debt crisis;empirical investigation;budget surplus;capital accumulation;oil revenue;population size;poverty alleviation;Political Economy;export orientation;oil boom;export competitiveness;comparative study;capital flight;export international;global policy;water reserve;labor resource;Industrial Policies;export revenue;rangeland degradation;human capital;agricultural growth;sustainable use;term debt;agricultural resource;labor statistic;commodity boom;standard economic;dutch economy;primary product;political difficulty;foreign sector;environmental commission;export price;subsequent years;base year;increased export;large subsidy;hydrocarbon reserve;public pressure;resource market;price volatility;Financial Sector;research bulletin;domestic cost;economic investment;live birth;productive investment;wealth effect;Fiscal policies;Young Workers;technological progress;labor movement;income source;higher inequality;dramatic increases;mineral activity;world market;social aspect;educated population;manufacturing industry;excess revenue;mineral rent;income inequality;central policy;increasing inequality;principal source;substantive evidence;adjustment policy;personal communication;domestic economy;rural income;international currency;rural area;domestic investment;game reserve;coffee production;mining company;mining companies;technological improvement;coffee price;negative effect;soil erosion;government resource;incentive structure;rural average;long-term growth;resource economy;copper price;Macroeconomic Policy;political influence;competitive sector;agricultural productivity;Resource export;significant factor;higher consumption;natural environment;vested interests;environmental cost;coal dust;commodity-price volatility;skilled service;stabilization fund;precautionary measure;employment potential;domestic price;statistical information;mining operation;legal framework;resource-rich country;export receipts;international investment;foreign reserve;interest argument;income areas;construction sector;environmental hazard;inflationary pressure;Soda Ash;Population Sector;policy prescriptions



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Sarraf, Maria Jiwanji, Moortaza

Beating the resource curse : the case of Botswana (English). Environment Department working paper,no. 83. Environmental economics series Washington, D.C. : World Bank Group.