• Extractive economies, institutions and development: implications for BRICS and Emerging Economies

      Anand, Prathivadi B. (2020-12-17)
      Extractive economies can use the natural resource dividend for infrastructure and sustainable development though this involves overcoming many challenges. The original contribution of this chapter is to see BRICS as natural resource rich economies that have not yet signed up to the Extractive Industries Transparency Initiative (EITI). The paper reports original analysis of relationship between resource dependence and human development index for the period 1990 to 2015 which suggests that non-resource rich countries tend to have higher values of HDI than resource rich countries. Using in depth case studies of two countries that have joined EITI (namely Norway and Mongolia) and two emerging economies that have not joined the EITI (Botswana and Chile) and one of the BRICS (namely Brazil), this chapter highlights some of the successes and challenges in using the natural resource wealth to transform economic and social development outcomes. Governance indicators of these cases suggest that transparency initiatives can be helpful but they should be part of a larger programme of transparency and institutional development. The analysis highlights that the links between extractive economies, policies, institutions and human development outcomes are complex and require long term policies and commitments. Three specific policy issues for BRICS are identified.