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Distribution and sustainable development in a natural resource-based economy

Ram, Justine (2012) Distribution and sustainable development in a natural resource-based economy. PhD thesis, London School of Economics and Political Science.

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There is still some ambiguity about what is sustainable development. From an economic point of view it involves maintaining a stock of assets for posterity that is equal to or greater than the stock of assets of the current generation. This is the basis of the capital approach to sustainable development. To measure how sustainable an economy is, based on the capital basis of sustainable development, multilateral institutions such as the World Bank use wealth accounting combined with the genuine savings approach to measure how well economies are saving for the future, net of current asset depreciation. These measures are useful for telling policy makers how their policies are contributing to sustainability and whether their economies are on a sustainable development path. Although these measures tell which assets are being depleted and the level of savings required, they do not tell why inadequate savings or inadequate investments might be occurring and how these assets are distributed among income groups within the economy. These measures are also not linked explicitly with the development prospects of the country and the needs of the current generation. This thesis attempts to assess if distributional outcomes affect how much countries save and therefore whether this has any impact on sustainability. To examine the impact of distribution on sustainability, a case study of Trinidad and Tobago (T&T) is conducted. T&T has had a negative genuine savings rate for most of the last two decades, primarily due to the excessive exploitation of its natural resources (oil and natural gas) without sufficient savings or reinvestment of the revenues from these resources. Has the distribution of these resource rents had any impact on saving outcomes? An attempt is made to answer these questions by assessing how government expenditure is distributed and who benefits most from the exploitation of the natural resources. The analyses contained within the thesis show that expenditure on energy subsidies, the distribution of human capital and the overall distributions of rents are all regressively distributed.

Item Type: Thesis (PhD)
Additional Information: © 2012 Justine Ram
Library of Congress subject classification: G Geography. Anthropology. Recreation > GF Human ecology. Anthropogeography
Sets: Departments > Geography and Environment

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