The presource curse in Africa: Economic and political effects of anticipating natural resource revenues

Jedrzej George Frynas*, Lars Buur

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

Abstract

The notion of the ‘resource curse’ suggests that large inflows of extractive industry revenues cause many adverse macro-economic and political effects. The resource curse literature focuses on the impact of actual inflows of
extractive resource revenues. However, anticipation of future resource revenues can also lead to negative macroeconomic and political effects even before resource extraction takes place, which points to the role of behavioral
aspects of the ‘resource curse’. Using empirical evidence from three African countries, this article investigates to what extent the anticipation of future extractive revenues led to ‘presource curse’ effects. It finds that all three
countries experienced negative effects as a result of anticipation of future extractive revenues, including economic growth volatility, higher levels of national debt, eroded governance and societal conflicts. Given the phenomenal increase in oil, gas and metal ore exploration across Africa, it is likely that many countries experience the negative effects of a presource curse without natural resource extraction or long before natural resources are actually extracted.
Original languageEnglish
JournalThe Extractive Industries and Society
Volume7
Issue number4
Pages (from-to)1257-1270
Number of pages14
ISSN2214-790X
DOIs
Publication statusPublished - Nov 2020

Keywords

  • Extractive industries,
  • expectations
  • Resource curse
  • Anticipation
  • Africa

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