The Importance of Commodities to the Economic Growth of Developing Countries: Myth or Reality?

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bachelor_Ijäs_Oskari_2022.pdf (2.86 MB)

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School of Business | Bachelor's thesis
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Date

2022

Department

Taloustieteen laitos

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Mcode

Degree programme

Taloustiede

Language

en

Pages

24+3

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Abstract

Poor economic performance in resource-rich developing countries is usually argued to be a result of their dependency on export revenue from those commodities possessed. This literature review examines how vulnerable those countries really are to commodity price changes, finding that commodity shocks are not as important determinants for the economic fluctuation than sometimes argued. However, the geographical reality of possessing commodities may have some significant indirect effects to the matter. Ultimately this 'resource curse' -phenomena seems to be driven by fiscal mismanagement and poor institutions in those countries. Commodities seem to explain partly the poor economic performance observed but these underlying governmental factors could have a huge impact on the outcome if managed properly.

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Thesis advisor

Kitti, Mitri

Keywords

resource curse, commodity-dependency, developing countries, growth volatility, fiscal management, institutional quality

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https://urn.fi/URN:NBN:fi:aalto-202210165883

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[kand] Kauppakorkeakoulu / BIZ (Open Access)