Resource information
Natural resource abundance can lead to
strong economic growth if resource rents are well invested
in physical assets and other forms of productive capital.
This paper focuses on the case of the resource-abundant
economies in Eurasia, which has been less documented in the
literature on natural resource-led development than other
parts of the world. The analysis shows that the stock of
productive physical assets is relatively low, contrary to
common perceptions about the Soviet system. The
infrastructure that was inherited from the Soviet system
primarily serves to meet basic human needs; few assets
support the development of competitive and sustainable
economies. At a deeper level, the paper documents that low
accumulation of physical capital over the past two decades
has been driven by weak institutions and economic policies
associated with the presence of resource rents, along with a
poor public investment management process. This paper
complements existing empirical studies by presenting
evidence on the mechanisms through which natural resources
and physical capital have interacted in setting Eurasian
economies on a fragile development path.
