1st Edition

Fiscal Policy and the Natural Resources Curse
How to Escape from the Poverty Trap

ISBN 9780367110796
Published October 26, 2018 by Routledge
246 Pages 23 B/W Illustrations

USD $51.95

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Book Description

It is widely accepted that natural resource wealth, especially in the form of oil and minerals, can be a key factor in inhibiting economic development. Many of the countries that are richest in natural resources – including oil, metals and diamonds – are amongst the world’s poorest. Why?

Fiscal Policy and the Natural Resources Curse re-examines this ancient, unsolved puzzle, asking why many governments of natural resource-intensive countries are incapable, in a globalised world, of dealing with the natural-resource curse. This book offers a detailed analysis of the power-relationships which underpin the natural resource curse, using both statistical analysis and country case studies from Africa and Latin America to pinpoint the strategies that have enable developing countries to break out of the poverty trap. The book differs from other works on this subject, as it not only identifies the issues at stake but also offers solutions in the form of a series of suggested policy measures. The work focusses in particular on fiscal escape routes, namely measures to develop and diversify the tax system, and to reallocate and target public expenditure.

This volume will be of great interest to scholars of economic development, the economics of natural resources and economic growth as well as all those with an interest in development, global politics and anti-poverty policies.

Table of Contents


List of Figures

List of Tables


List of Abbreviations

    1. Introduction
    2. The way forward: how do ‘inclusive’ alliances happen?
    3. 1. Analytic framework

      2. Case studies of resource-intensive countries:

      i. The classic comparison: Nigeria vs. Indonesia revisited

      ii. Other ‘strategic alliances’: Chile, Botswana, Ghana and Bolivia

      iii. Other rentier-dominated states: Venezuela and Zambia

      3. Summary and conclusion

    4. The fiscal politics of mineral development in Ghana
    5. 1. Introduction: political settlements and their economic consequences prior to the 1980s

      2. Transformation of the tax structure: political and economic drivers, 1981-2015

      3. The politics of public expenditure allocation and poverty in Ghana

      4. Mining, technical rigidity and poverty

      5. Can Ghana be seen as a ‘proto-developmental state’

    6. Zambia: democratization without a ‘social dividend’?
    7. 1. Introduction

      2. The political and economic background to 2006

      3. Neoliberalism challenged: the evolution of the political bargain and of tax policy 2006-2015

      4. The public finance bargain and welfare outcomes

    8. Bolivia: a ‘hybrid’ political economy?
    9. 1. Introduction

      2. The political and economic background to 2003

      3. Neoliberalism challenged: the evolution of the political bargain and of tax policy 2005-2014

      4. Public expenditure, social policies and poverty

      5. Politics, fiscal policy and political stability

      6. Summing-up and longer-term challenges for policy

      Appendix: Survey results

    10. The politics of inclusive fiscal policy
    11. 1. The basic story

      2. Drivers of tax revenue, competitiveness and poverty trends

      3. Testing the model

      4. Conclusions

    12. Conclusion: How can mineral-rich countries create ‘developmental states’?

    1. The politics of ‘developmental states’

    2. Export diversification: what distinguishes the successful cases?

    3. Concluding thoughts: what can these ideas do for the poorest?



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Paul Mosley is a development economist with strong interests in politics and the welfare state. He has held professorial chairs at the universities of Manchester and Reading, and is currently Professor of Economics at the University of Sheffield, UK.