VORACIOUS TRANSFORMATION OF A COMMON NATURAL RESOURCE INTO PRODUCTIVE CAPITAL*

I analyze a power struggle where competing factions have private financial assets and deplete a common stock of natural resources with no private property rights. I obtain a feedback Nash equilibrium to the dynamic common‐pool problem and obtain political variants of the Hotelling depletion rule and the Hartwick saving rule. Resource prices and depletion occur too fast, so substitution away from resources to capital occurs too fast and the saving rate is too high. The power struggle boosts output, but depresses sustainable consumption. Genuine saving is nevertheless zero in a fractionalized society. World Bank estimates may be too optimistic.     

Why do many resource-rich countries have negative genuine saving?: Anticipation of better times or rapacious rent seeking

We investigate the Hartwick rule for saving of a nation necessary to sustain a constant level of private consumption for a small open economy with an exhaustible stock of natural resources. The amount by which a country saves and invests less than the marginal resource rents equals the expected capital gains on reserves of natural resources plus the expected increase in interest income on net foreign assets plus the expected fall in the cost of resource extraction due to expected improvements in extraction technology. Effectively, depletion is then postponed until better times. This suggests that it is not necessarily sub-optimal for resource-rich countries to have negative genuine saving. However, in countries with different groups with imperfectly defined property rights on natural resources, political distortions induce faster resource depletion than suggested by the Hotelling rule. Fractionalised societies with imperfect property rights build up more foreign assets than their marginal resource rents, but in the long run accumulate less foreign assets than homogenous societies. Hence, such societies end up with lower sustainable consumption and are worse off, especially if seepage is strong, the number of rival groups is large and the country does not enjoy much monopoly power on the resource market. Genuine saving is zero in such societies. However, World Bank genuine saving figures based on market rather than accounting prices will be negative, albeit less so in more fractionalised societies with less secure property rights.     

The curse of natural resources in fractionalized countries

This paper develops a model that can explain why natural resources are a blessing for some countries, but a curse for others. In this model, natural resources cause fighting activities between rivalling groups. Fighting reduces productive activities and weakens property rights, making productive activities even less attractive. The aggregate production decrease exceeds the natural resources’ direct positive income effect if and only if the number of rivalling groups is sufficiently large. The model thus predicts that natural resources lower incomes in fractionalized countries, but increase incomes in homogenous countries. Empirical evidence supporting this prediction is provided.     

新世纪日本能源安全战略及其启示

作为资源贫乏的能源消费大国,日本在国内致力于能源多元化、能源储备、节约能源和培育本国国际能源资本,在国际上展开与主要产油国能源外交,竭力保障能源供应安全,并且已经取得了令人瞩目的成就.新世纪日本能源战略的走向无疑对能源消费日益巨大的中国有着借鉴作用.     

Government Partisanship and Property Rights: Cross‐Country Firm‐Level Evidence

Property rights are essential to economic development but vary with the political environment. We develop and test the claim that government partisanship influences the security of business firms' property rights: the perceived security of property rights increases when right‐wing parties take power and declines with the election of left‐leaning parties. Unlike research that uses country‐level aggregates to draw inferences about the determinants of secure property rights, we analyze survey responses of over 7,400 firm owners from 73 countries using a novel difference‐in‐differences approach. We find that the political partisanship of the government in power strongly affects individual perceptions of property rights: firm owners are more likely to perceive that their property rights are secure under right‐leaning governments. Our results are robust to firm‐ and country‐level economic performance as well as controls for political institutions that might induce more stability to property rights, such as the number of checks and balances (veto players) in a system. Overall, our results indicate that business owners' beliefs about the security of property rights are highly responsive to changes in government partisanship.     

The composition of foreign capital stocks in South Africa: The role of institutions,domestic risk and neighbourhood effects

Foreign capital inflows are an important source of funds to finance investment in developing economies. International finance literature is therefore concerned with how institutional factors like property rights and corruption affect foreign capital inflows. We investigate the determinants of the absolute volumes and composition of foreign capital stocks in South Africa, focusing on the role played by institutional quality (property rights), domestic default risk and neighbourhood effects as potential determinants. The empirical results show that secure property rights and low default risk in the host country positively affect the absolute volumes of both long-term foreign capital and short-term foreign capital, but tilt the composition in favour of long-term foreign capital. Empirical results also demonstrate the existence of neighbourhood effects where the institutional environment in Zimbabwe significantly impacts on South Africa's foreign capital inflows. In this regard, weak property rights in Zimbabwe lead to an increase in South Africa's foreign direct investment (FDI), but a reduction in South Africa's portfolio investment. This suggests that Zimbabwe and South Africa compete for foreign direct investment in similar sectors, and present two alternative investment destinations to foreign investors. By contrast, weak property rights in Zimbabwe appear to raise the perceived risk for portfolio investment in South Africa.     

Adjusted net saving and welfare change

The World Bank has estimated Adjusted net (or genuine) saving (ANS) as a macro level index of sustainable development. ANS extends the conventional net saving by adding human capital accumulation and deducting natural resources losses. This paper tests ANSas an index of sustainable development. It examines whether ANS explains changes in welfare. Welfare is measured by Infant mortality rate (IMR) and Human Development Index (HDI). The study was conducted in 36 selected developing and developed countries and covers the period 1971-2000. The results suggest a positive and significant relationship between Adjusted net saving and aggregate welfare but weak in magnitude.     

Savings growth and the path of utility

Abstract.  We derive an expression relating the change in instantaneous utility to the growth of net (genuine) saving in an economy with multiple stocks and externalities that maximizes welfare in the utilitarian sense. This result is then shown to hold for decentralized competitive efficient economies as well, to yield an extension of the Hartwick rule: instantaneous utility is non-declining along a development path if genuine saving is decreasing. By way of example the rule is applied as a constant genuine saving rate rule in a simple Dasgupta-Heal-Solow-Stiglitz economy. The rule yields a path with unbounded consumption and higher wealth than on the standard Hartwick constant consumption path.     

我国旅游资源产权问题探析

旅游企业产权明晰问题已逐渐被社会认同，而旅游资源产权明晰问题却未受到应有重视。我国旅游资源产权界定不清，产权制度安排不合理，已在某种程度上束缚和妨碍了我国旅游资源的合理利用和旅游业的进一步发展。旅游资源产权问题成为近期旅游界的一个热点话题。文章主要运用俱乐部理论、资源价值理论、产权理论等，从深层次上对我国旅游资源产权不明晰的成因进行了分析，并对构建我国现代旅游资源产权制度提出了一些建议。     

Do Natural Resources Depress Income Per Capita?

Most evidence for the resource curse comes from cross‐country growth regressions suffers from bias originating from the high and ever‐evolving volatility in commodity prices. These issues are addressed by providing new cross‐country empirical evidence for the effect of resources in income per capita. Natural resource dependence (resource exports) has a significant negative effect on income per capita, especially in countries with bad rule of law or bad policies, but these results weaken substantially once we allow for endogeneity. However, the more exogenous measure of resource abundance (stock of natural capital) has a significant negative effect on income per capita even after controlling for geography, rule of law and de facto or de jure trade openness. Furthermore, this effect is more severe for countries that have little de jure trade openness. These results are robust to using alternative measures of institutional quality (expropriation and corruption instead of rule of law).     

Country size and the rule of law: Resuscitating Montesquieu

In this paper, we demonstrate that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We outline a framework featuring two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the core of the country to the hinterland, and secondly that a large territory usually is accompanied by valuable rents and a lack of openness that both tend to distort property rights institutions. Our empirical analysis further shows some evidence that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law.     

OPTIMAL GROWTH, GENUINE SAVINGS AND LONG-RUN DYNAMICS

Green accounting theories have shown that negative genuine savings at some point in time imply unsustainability. Consequently, recent studies advocate the use of the genuine savings measure for empirical testing: a negative index implies that sustainability be rejected. However, this criterion cannot ascertain sustainability, because positive current genuine savings do not rule out genuine dissaving in the future. This paper derives a one‐to‐one relationship between the sign of long‐run genuine savings and the limiting condition for sustained utility in the capital‐resource growth model, assuming technical progress and resource renewability. This result suggests to extend the genuine saving method to include a test of the limiting condition: if this condition is empirically rejected, positive current genuine savings are delivering a false message.     

Predicting FDI inflows: Exploring a nonlinear relationship between peace years,oil wealth,and the rule of law

Despite previous studies investigating the impacts of various factors such as peace years, natural resources, and the rule of law on foreign direct investment (FDI), empirical findings remain inconclusive. Therefore, this study investigates the interplay between these factors in shaping host country conditions that facilitate FDI inflows. Using generalized additive models, we examine the simultaneous effects of peace years, oil wealth, and the rule of law on FDI inflows in a sample of non-OECD countries from 1970 to 2009. Our results reveal that established peace is a critical factor in attracting FDI inflows for both oil-exporting and non-oil-exporting countries. However, the effects of the rule of law vary depending on oil wealth. Oil-exporting countries receive more FDI inflows when they have a weak rather than a strong rule of law, while non-oil-exporting countries tend to receive more foreign investments when they have a moderately strong rule of law. We argue that countries with oil wealth combined with a moderately weak rule of law provide an environment that is conducive to multinational corporations (MNCs) in extractive industries seeking monopoly rents. Conversely, countries without oil wealth should create stable yet efficient environments that protect property rights and promote labor market flexibility to appeal to non-resource-seeking MNCs.     

基于自然资本的经济增长可持续条件研究

主流经济增长理论对经济增长可持续条件的研究普遍忽视了自然资源的贡献。随着自然资本的耗竭 ,经济增长的决定因素将由人造资本转向自然资本。技术进步必须从节约人造资本转向节约自然资本 ,只有技术进步能够充分提高自然资本的生产率 ,经济增长才会持续下去。当技术进步提高自然资本生产率的机会已经耗尽时 ,经济增长将停止 ,进入稳态。     

Determinants of the adjusted net saving rate in developing economies

The adjusted net saving rate, initially known as the genuine saving rate, was first published by the World Bank in the late 1990s as a more comprehensive measure of national saving and one more indicative of sustainable development. The adjusted net saving rate incorporated not just physical capital depreciation, but natural capital depletion and environmental damage, as well as including some human capital formation. In this paper, using a cross‐section of developing economies for 2001–2006, determinants of the adjusted net saving rate are estimated. For comparison, the same determinants for the gross national saving rate are estimated. Also, a basic Solow growth model is extended to incorporate natural resources and to justify a more comprehensive measure of savings, such as the adjusted net saving rate, for modeling economic growth. The two measures of savings are then compared as determinants in estimations of economic growth. Understanding the determinants of the adjusted net saving rate is useful for policies to promote sustainable development.     

Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual

How much produced capital would resource-abundant countries have today if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the last 30 years? We employ time series data on investment and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Venezuela, Trinidad and Tobago, and Gabon would all have as much produced capital as South Korea, while Nigeria would have five times its current level. A specific rule for sustainability – maintain positive constant genuine investment – is shown to lead to unbounded consumption.     

分权理论及其在自然资源产权制度改革中的应用

明确划分中央和地方政府的资源产权利益分配关系既是我国自然资源产权制度改革的重要约束条件,更是研究的基本视角之一。分权型政府主导下的、有限制的自然资源产权制度在实践上表现为中央与地方政府的权利分配以及地方政府之间的区域竞争,这必然会对自然资源产权制度的变革方向产生重要影响。建立一个从分权到合作的M型分权模型,可以解释我国自然资源产权制度改革进程中政府间分权关系的演进趋势。     

GENUINE SAVING AND POSITIONAL EXTERNALITIES

Much evidence suggests that people are concerned with their relative consumption. Yet, positional externalities have so far been ignored in savings‐based indicators of sustainable development. This article examines the implications of relative consumption concerns for measures of sustainable development by deriving analogues to genuine saving when people are concerned with their relative consumption. Unless the positional externalities have been internalized, an indicator of such externalities must be added to genuine saving to arrive at the proper measure of welfare change. We also show how relative consumption concerns affect the way public investment ought to be reflected in genuine saving.     

Property Rights,Predation, and Productivity*

I develop a neoclassical growth model with imperfect property rights in which predation entails both waste of resources and deadweight losses. According to the model, in the United States, the welfare costs of crime represent a loss of 18.6 percent of consumption per capita. This loss is 57.8 percent for a country in the average of the last decile of the distribution of an index of business costs of crime across 94 countries. An increase of one standard deviation in the institutional quality index increases GDP per worker by 23 percent for a country in the average of the last decile of its distribution.     

Governance during Social Transformations: Challenges for Africa

The governance advice that is offered to Africa usually identifies a list of ‘good governance’ goals like stable property rights, a rule of law, low corruption and government accountability as preconditions for development. These goals are difficult to implement not only because they are expensive public goods but in addition their enforcement is typically at variance with powerful interests in the political settlements of developing countries. The historical evidence and much institutional theory suggests that during their social transformations successful developing countries had a different set of ‘developmental’ or ‘growth-enhancing’ governance capabilities that enabled their states to support critical property rights transformations and assist firms in acquiring and learning to use new technology. The institutions and policies they used differed because their political and institutional starting points were different. There are therefore no blueprints for Africa or anywhere else, but certainly the good governance menu is unrealistic. Rather African countries have to experiment and develop institutional and policy solutions that work in their context and which are appropriate for transforming property rights and accelerating technology adoption.