The endowment of natural resources hasoften been associated with disappointing economicdevelopment. This phenomenon is referred to in theliterature as the "resource curse," whichhypothesizes that economies experiencing resource booms,either through price increases or new discoveries, willexperience unsustainable growth rates. There are variousmechanisms through which a resource-boom can negativelyimpact on an economy. For instance, it can lead to excessivegovernment expenditure during the boom period and drasticcuts when the boom ends; detrimental impacts on non-boomtradable sectors; inefficient investment beyond theabsorptive capacity of the country; and rent seekingbehavior. By exploring the case of the mineral boom inBotswana, this paper will demonstrate that the resourcecurse is not necessarily the fate of resource abundantcountries. The adoption of sound economic policies and thegood management of windfall gains have allowed Botswana tocontinuously manage growth and to become one of the greatsuccess stories of developing countries.
PDF
download
878987797
028-85220240
