Browsing by Author "Mensah, J.T.,"
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Item Natural resource revenues and public investment in resource-rich economies in sub-Saharan Africa(John Wiley & Sons, Inc, 2017-03-17) Karimu, A.,; Adu, G.,; Marbuah, G.,; Mensah, J.T.,; Amuakwa-Mensah, K.The general policy prescription for resource-rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channeled into accumulating foreign assets such as a sovereign public fund as done in Norway and other developed but resource-rich countries. This might not be a correct policy prescription for resource-rich sub-Saharan African (SSA) countries, where public capital is very low to support the needed economic growth. In such countries, rents from resources serve as an opportunity to scale-up the needed public capital. Using a panel data for the period 1990–2013, we find in line with the scaling-up hypothesis that resource rents significantly increases public investment in SSA and that this tends to depend on the quality of political institutions. Moreover, we also find evidence of a positive effect of public investment on economic growth, which also depends on the level of resource rents.