Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger
This paper examines spending plans suggested by the recent literature regarding Dutch disease and examines their implications to Niger relative to its expanding mineral sector. The key to the benefits of significant mineral revenue lies with the pr...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/11/18482719/dutch-disease-spending-strategies-resource-rich-low-income-country-case-niger http://hdl.handle.net/10986/16923 |
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okr-10986-169232021-04-23T14:03:33Z Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger Go, Delfin S. Robinson, Sherman Thierfelder, Karen Utz, Robert BOOM-BUST CYCLE DUTCH DISEASE HUMAN CAPITAL MINERAL REVENUE POVERTY REDUCTION REAL CONSUMPTION SPENDING STRATEGIES SUPPLY FLEXIBILITY This paper examines spending plans suggested by the recent literature regarding Dutch disease and examines their implications to Niger relative to its expanding mineral sector. The key to the benefits of significant mineral revenue lies with the productivity and supply responses of spending. If significant output gain is ensured, then there is little difference across the spending plans in their effects on real consumption. The overshooting of relative prices of the non-tradable sector or the shrinking share of traded sectors in gross domestic product is also ameliorated with greater supply flexibility. Growth paths of alternative spending strategies differ markedly in timing and pattern when spending does not raise productivity. As a caution against expectations that exaggerate the benefits of mineral revenue under all circumstances, the more aggressive spending plan may result in a boom-bust cycle if fiscal adjustments and debt repayments are necessary for any significant borrowing against future revenue and productivity gains are not realized. Using extractive industries revenue for transfers to households would have a greater effect on poverty reduction in the short and medium term but the long-run gains from investment in human and physical capital are likely to offset the initial lack of pro-poor bias. Different strategies differ significantly with regard to risks and required technical implementation capacity and political capacity to sustain a chosen course of action. 2014-02-05T15:22:11Z 2014-02-05T15:22:11Z 2013-11 http://documents.worldbank.org/curated/en/2013/11/18482719/dutch-disease-spending-strategies-resource-rich-low-income-country-case-niger http://hdl.handle.net/10986/16923 English en_US Policy Research Working Paper;No. 6691 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Niger |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BOOM-BUST CYCLE DUTCH DISEASE HUMAN CAPITAL MINERAL REVENUE POVERTY REDUCTION REAL CONSUMPTION SPENDING STRATEGIES SUPPLY FLEXIBILITY |
| spellingShingle |
BOOM-BUST CYCLE DUTCH DISEASE HUMAN CAPITAL MINERAL REVENUE POVERTY REDUCTION REAL CONSUMPTION SPENDING STRATEGIES SUPPLY FLEXIBILITY Go, Delfin S. Robinson, Sherman Thierfelder, Karen Utz, Robert Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| geographic_facet |
Africa Niger |
| relation |
Policy Research Working Paper;No. 6691 |
| description |
This paper examines spending plans
suggested by the recent literature regarding Dutch disease
and examines their implications to Niger relative to its
expanding mineral sector. The key to the benefits of
significant mineral revenue lies with the productivity and
supply responses of spending. If significant output gain is
ensured, then there is little difference across the spending
plans in their effects on real consumption. The overshooting
of relative prices of the non-tradable sector or the
shrinking share of traded sectors in gross domestic product
is also ameliorated with greater supply flexibility. Growth
paths of alternative spending strategies differ markedly in
timing and pattern when spending does not raise
productivity. As a caution against expectations that
exaggerate the benefits of mineral revenue under all
circumstances, the more aggressive spending plan may result
in a boom-bust cycle if fiscal adjustments and debt
repayments are necessary for any significant borrowing
against future revenue and productivity gains are not
realized. Using extractive industries revenue for transfers
to households would have a greater effect on poverty
reduction in the short and medium term but the long-run
gains from investment in human and physical capital are
likely to offset the initial lack of pro-poor bias.
Different strategies differ significantly with regard to
risks and required technical implementation capacity and
political capacity to sustain a chosen course of action. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Go, Delfin S. Robinson, Sherman Thierfelder, Karen Utz, Robert |
| author_facet |
Go, Delfin S. Robinson, Sherman Thierfelder, Karen Utz, Robert |
| author_sort |
Go, Delfin S. |
| title |
Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| title_short |
Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| title_full |
Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| title_fullStr |
Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| title_full_unstemmed |
Dutch Disease and Spending Strategies in a Resource-Rich Low-income Country : The Case of Niger |
| title_sort |
dutch disease and spending strategies in a resource-rich low-income country : the case of niger |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/11/18482719/dutch-disease-spending-strategies-resource-rich-low-income-country-case-niger http://hdl.handle.net/10986/16923 |
| _version_ |
1764434905596428288 |