James E. MahonJr.

Bio: James E. MahonJr. is an academic researcher from Williams College. The author has contributed to research in topics: Latin Americans & Industrialisation. The author has an hindex of 1, co-authored 1 publications receiving 87 citations.

Was Latin America too rich to prosper? Structural and political obstacles to export‐led industrial growth

Abstract: This essay explores the divergence in economic policy and performance between East Asia and Latin America. It offers a typology of explanations from the political economy literature. Evidence is presented for an explanation focused upon the relative size of the income sacrifice entailed in the competitive export of simple manufactures. In the 1960s, Latin American countries would have faced massive, politically unthinkable currency devaluations, had they sought to compete with East Asia. Thus Latin American dependency in the post‐war period has been more complex than often supposed. The essay ends with thoughts on export‐led industrialisation in indebted Latin America.

Resource Impact: Curse or Blessing? A Literature Survey

Abstract: Common sense and economic theory suggest large revenues from natural resource projects should generate economic progress and development. Yet much evidence argues the opposite and that resource-rich countries suffer from ‘resource curse’. This paper provides a survey of the academic literature on the impact of natural resources on an economy. The topic has long attracted interest in the economics literature but more recently, interest has revived. The paper first considers the large body of empirical work examining the relationship between resource abundance, poor economic performance and poverty. While this evidence supports the view of a negative impact, it is not without criticism and some assert a few countries managed instead to receive a ‘blessing’. The paper assesses how the literature explains the transmission mechanisms between resource revenues and economic damage. Six areas are discussed: a long-term decline in terms of trade; revenue volatility; Dutch disease; crowding out effects; increasing the role of the state; and the socio-cultural and political impacts. Finally, various options from the literature to avoid negative impacts are analysed: not developing the mineral deposits; diversifying the economy away from dependence on oil, gas and mineral exports; sterilising the incoming revenue; the use of stabilisation and oil funds; and reconsidering investment policies. The paper finishes by assessing what political reforms might be needed to carry out the necessary policies to avoid negative impacts.

Natural Resources and Economic Development

Abstract: Preface 1. Natural resources and developing countries: an overview 2. Natural resource-based economic development in history 3. Does natural resource dependence hinder economic development? 4. Frontier expansion and economic development 5. Explaining land use change in developing countries 6. The economics of land conversion 7. Does water availability constrain economic development? 8. Rural poverty and resource degradation 9. Can frontier-based development be successful? 10. Policies for sustainable resource-based development in poor economies.

Natural resource endowment, the state and development strategy

Abstract: This paper speculates that a linear causal chain runs from the natural resource endowment to the landholding system, the type of political state, the choice of development strategy and economic performance. It suggests that resource-deficient countries tend to have peasant-dominated landholding systems which foster autonomous political states and growth-promoting economic linkages. Such countries out-perform resource-rich ones which have more varied landholding patterns which emphasise conflicts over rents and foster factional political states and weaker economic linkages. The preoccupation with rents in resource-rich countries impedes beneficial land reform and creates inefficient industry in a counter-productive effort to create non-farm jobs. Resource-deficient countries cannot afford such inefficient transfers and pursue a development strategy which uses scarce resources more effectively. © 1997 by John Wiley & Sons, Ltd.

Leader behaviour and the natural resource curse

Abstract: We discuss political economy mechanisms which can explain the resource curse, in which an increase in the size of resource rents causes a decrease in the economy’s total value added. We identify a number of channels through which resource rents will alter the incentives of a political leader. Some of these induce greater investment by the leader in assets that favour growth (infrastructure, rule of law, etc.), others lead to a potentially catastrophic drop in such activities. As a result, the effect of resource abundance can be highly non-monotonic. We argue that it is critical to understand how resources affect the leader’s ‘survival function’, i.e. the reduced-form probability of retaining power. We also briefly survey decentralized mechanisms, in which rents induce a reallocation of labour by private agents, crowding out productive activity more than proportionately. We argue that these mechanisms cannot be fully understood without simultaneously studying leader behaviour.