Resource rents, savings behavior, and scenarios of economic development

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dc.contributor.authorSadik-Zada, Elkhan R.
dc.date.accessioned2023-04-14T11:29:58Z
dc.date.available2023-04-14T11:29:58Z
dc.date.issued2023
dc.description.abstractThe paper revisits the nexus between natural resources and economic growth from the lens of development economics. It augments the traditional dual-sector economy model by the assumption that in addition to capitalists, also workers contribute to the capital accumulation through private savings out of their wage income. The proposed differential game theory model of the interaction between the public and the elites identifies two realistic open loop Nash and three Stackelberg scenarios for the management of the commodity driven budget surplus. Based on the conventional transversality conditions, the model detects a progressing decay of social cohesion and institutional quality. It shows that at the early stages of the exploitation of the natural resource riches, both the public and elites enable a rather modernization-friendly scenarios. At the rather advanced stages of the exploitation of natural resources both groups try to maximize their short-term private benefits and by doing so protract or even inhibit the process of economic modernization. The study finds that the savings behavior of the workers has a positive modernization effect. Nevertheless, workers’ savings cannot fully offset the negative modernization effects of the inferior management of natural resource revenues.en_US
dc.identifier.citationSadik-Zada, E. R. (2023, March). Resource rents, savings behavior, and scenarios of economic development. Resources Policy, 81, 103258. https://doi.org/10.1016/j.resourpol.2022.103258en_US
dc.identifier.urihttps://doi.org/10.1016/j.resourpol.2022.103258
dc.identifier.urihttp://hdl.handle.net/10566/8795
dc.publisherElsevier Ltden_US
dc.subjectdual economy natural resourcesen_US
dc.subjectnash equilibriumen_US
dc.subjectStackelberg equilibriumen_US
dc.subjectCapital-intensityen_US
dc.titleResource rents, savings behavior, and scenarios of economic developmenten_US
dc.typeArticleen_US

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Research articles (South African-German Centre for Development Research and Criminal Justice)