Show simple item record

dc.contributor.authorVAN DER PLOEG, Frederick
dc.date.accessioned2007-10-27T08:13:12Z
dc.date.available2007-10-27T08:13:12Z
dc.date.issued2007
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/7339
dc.description.abstractMany resource-rich countries have negative genuine saving rates, so deplete their exhaustible natural resource wealth faster than they build up wealth in other assets. This phenomenon is stronger in more fractionalized countries with poor legal systems. We explain this by a power struggle about the control of natural resources. Competing fractions in society thus have a private stock of financial assets and a common stock of natural resources. We solve a dynamic commonpool problem and obtain political economy variants of the Hotelling rule for resource depletion and the Hartwick saving rule necessary to sustain constant consumption in an economy with exhaustible natural resources. Resource depletion is faster than demanded by the Hotelling rule. As a result, the country has negative genuine saving rates and is running down its national wealth. The country saves more in financial assets than the current natural resource rents. Still, the erosion of natural wealth exceeds the accumulation of financial assets. Even though the power struggle boosts output, consumption is sub-optimally low. The highlighted political distortions are larger if the country is more fractionalized.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2007/38en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectE20en
dc.subjectF32en
dc.subjectO13en
dc.subjectQ01en
dc.subjectQ32en
dc.subjectExhaustible natural resourcesen
dc.subjectHotelling resource rentsen
dc.subjectHartwick ruleen
dc.subjectgenuine saving, capitalen
dc.subjectsustainable consumptionen
dc.subjectrapacious rent seekingen
dc.subjectcommon poolen
dc.subjectvoracityen
dc.subjectfractionalizationen
dc.titleGenuine Savings and the Voracity Effecten
dc.typeWorking Paperen
dc.neeo.contributorVAN DER PLOEG|Frederick|aut|
eui.subscribe.skiptrue


Files in this item

Icon

This item appears in the following Collection(s)

Show simple item record