GEOG 216 Lecture Notes - Lecture 24: Sovereign Wealth Fund, Direct Market, Resource Allocation

• School: McGill University
• Department: Geography
• Course: GEOG 216
• Professor: Oliver Coomes

Document Summary

Lecture 24 - the resource curse & dutch disease. Rent-seeki(cid:374)g, patro(cid:374)age a(cid:374)d (cid:858)li(cid:448)i(cid:374)g off the la(cid:374)d(cid:859) Avoiding the resource curse: norway, developing countries. The paradox of plenty (cid:862)god ga(cid:448)e us (cid:373)aize a(cid:374)d the de(cid:448)il ga(cid:448)e us oil(cid:863) (mexican proverb) The (cid:858)resource curse(cid:859) -- resource as a windfall, important developmental challenges, how to manage them, etc. Symptoms: resource wealth; slow growth; high poverty; poor governance; weak states; revolution and conflict. Eco(cid:374)o(cid:373)ic (cid:449)i(cid:374)dfalls : boom and bust cycles, deindustrialization. Inflation and overvalued exchange rates: withering agricultural sector. Not a huge correlation; wealth doesn"t mean economy will grow. Resource characteristics: point-source (appropriable, owned by state, low production cost; high value -- creates resource rent. Rents, not abundance -- is what causes issues regarding resource curse occurrence. Income volatility -- price of oil varies substantially leads to instability: rent-seeki(cid:374)g, patro(cid:374)age a(cid:374)d (cid:858)li(cid:448)i(cid:374)g off the la(cid:374)d(cid:859, dutch disease.