Resource Windfalls, Macroeconomic Stability and Growth: The Role of Political Institutions

WPIEA2011142 Image
Price:  $18.00

Author/Editor: Rabah Arezki, Kazim Kazimov, Kirk Hamilton
Release Date: © June, 2011
ISBN : 978-1-45526-643-2
Stock #: WPIEA2011142
English
Stock Status: On back-order

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Description

We use a new dataset on non-resource GDP to examine the performance of commodity-exporting countries in terms of macroeconomic stability and economic growth in a panel of up to 129 countries during the period 1970-2007. Our main findings are threefold. First, we find that overall government spending in commodity-exporting countries has been procyclical. Second, we find that resource windfalls initially crowd out non-resource GDP which then increases as a result of the fiscal expansion. Third, we find that in the long run resource windfalls have negative effects on non-resource sector GDP growth. Yet, the effects turn out to be statistically insignificant when controlling for government spending. Both the effects of resource windfalls on macroeconomic stability and economic growth are moderated by the quality of political institutions.

Taxonomy

Balance of trade , Commodities , Economic policy , Exports , Fiscal policy , International trade




More publications in this series: Working Papers


More publications by: Rabah Arezki ; Kazim Kazimov ; Kirk Hamilton