Bacon & Tordo - Managing Resource Rents: The Special Challenges in Post Conflict Countries

Bacon, R., & Tordo, S., Managing Resource Rents: The Special Challenges in Post Conflict Countries, World Bank Group Private Sector Development Vice Presidency, February 2006, Note no. 302.

This Note focuses on the challenge of managing resource rents in post conflict countries. It examines the characteristics of post conflict countries which usually have severely damaged infrastructures, poor economic performance and weak civil service. As a result, there is usually a need for public spending and the creation of jobs.

The paper examines ways in which resource revenues, which offer a base for economic recovery, could be distributed amongst members of the society. These include compensating resource producing regions, spending and saving for the future and the decision to distribute directly to citizens. The paper further notes the need for efficient management of resource revenues by developing competence in the mineral sector, managing resource rents volatility through stabilization funds and having a properly designed sustainable expenditure plan.

The paper examines two post conflict countries: Timor Leste, and Sudan. The paper concludes by highlighting certain governance principles necessary for sustained wealth in post conflict countries.

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