Political Economy of Natural Resource Richness

Rabah Arezki at Columbia Law School: In seeking to prevent negative fallout from resource development efforts, Arezki listed the following suggestions:

• Diversification of resources, production, and revenue-streams away from the natural resource sector, so that natural resources essentially become a smaller piece of a nation’s total “pie;” in this sense, non-resource sector revenue may be used as a hedge against macroeconomic volatility;
• Transfer of / movement away from natural resource wealth/capital to human and physical capital; and
• Employment of frameworks to guide optimal spending on resource development as well as resource use; such frameworks should seek to anchor public spending and smooth consumption.