Title Commodity windfalls, polarization, and net foreign assets : panel data evidence on the voracity effect / prepared by Rabah Arezki and Markus Brückner

Published Washington, D.C. : International Monetary Fund, 2010

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Description 1 online resource (24 pages) Series IMF working paper, 2227-8885 ; WP/10/209 IMF working paper ; WP/10/209. Contents Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Data; Commodity Revenue Windfalls; Polarization; Net Foreign Assets and Other Data; Table 1. Summary Statistics; Table 2. Correlation Matrix; III. Estimation Strategy; IV. Main Results; Table 3. Commodity Windfalls and Net Foreign Assets; Table 4. Commodity Windfalls and Net Foreign Assets; Table 5. Commodity Windfalls, Polarization, and Net Foreign Assets; Table 6. Commodity Windfalls, Polarization, and the Terms of Trade; Table 7. Commodity Windfalls, Polarization, and Private Investment Table 8. Commodity Windfalls, Growth, Government Spending, and CorruptionTable 9. Commodity Windfalls, Polarization, and the Current Account; V. Conclusion; Table 1. The Terms of Trade, Polarization, and Net Foreign Assets; Table 1. List of Countries; Table 2. List of Commodities; References; Footnotes Summary This paper examines the effect that windfalls from international commodity price booms have on net foreign assets in a panel of 145 countries during the period 1970-2007. The main finding is that windfalls from international commodity price booms lead to a significant increase in net foreign assets, but only in countries that are homogeneous. In polarized countries, net foreign assets significantly decreased. To explain this asymmetry, the paper shows that in polarized countries commodity windfalls lead to large increases in government spending, political corruption, and the risk of expropriation, with no overall effect on GDP per capita growth. The paper's findings are consistent with theoretical models of the current account that have a built-in voracity effect Bibliography Includes bibliographical references Notes Print version record Subject International finance -- Econometric models Commodity control. Commodity control International finance -- Econometric models Form Electronic book Author Bückner, Markus, author IMF Institute, issuing body. ISBN 1283558785 9781283558785 1455204536 9781455204533 9781455274796 1455274798 9781455205400 1455205400

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