Looking back: Growth by commodity prices?

lundi 8 février 2010 ·

Back in the sixties and seventies,the World Bank branded countries like Hong Kong, Singapore and Mauritius as "doomed" while African countries like Nigeria with high levels of natural ressources were branded as "possible success" story. To make a long story short, the idea was that you could plan "development". This growth and development would be fostered by high commodity prices. Nowadays, the World Bank has changed its discourse and - to its credit - become more focused and less rigid. Still, back in those days, the World Bank was basically saying that prices for copper would increase so much that countries like Zambia and Zaire (where copper accounted for 88 percent and 46 percent of exports)that they would be able to get the funds necessary to finance government spending and stimulate the economy. This never happened, real (and even nominal sometimes) commodity prices have a tendency to decline as economists Julian Simon(in The Ultimate Ressource) and Peter Bauer (Dissent on Development Economics) noted. The graph below illustrates nominal copper prices between 1970 and 1991 and in the broken lines, we see the World Bank's projections for prices. The advices of the World Bank often created misplaced optimism



A similar story is true for Cotton



And growth did follow fluctuations in prices - often negatively...


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Source: Angus Deaton. 1999. Commodity Prices and Growth in Africa. The Journal of Economic Perspectives, Vol. 13, No. 3 (Summer, 1999), pp. 23-40.

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Auteurs

Bryan Breguet est candidat au doctorat en sciences économiques à l’université de Colombie-Britannique. D’origine Suisse, il a passé les cinq dernières années au Québec au cours desquelles il s’est engagé en politique provinciale malgré le fait qu’il ne possédait pas encore la citoyenneté canadienne. Il détient un B.Sc en économie et politique ainsi qu’une maitrise en sciences économiques de l’université de Montréal. Récipiendaire de plusieurs prix d’excellences et bourses, il connaît bien les méthodes quantitatives et leurs applications à la politique.







Vincent Geloso holds a master’s degree in economic history from the London School of Economics, with a focus on business cycles, international development, labor markets in preindustrial Europe and the new institutional economics. His research work examined the economic history of the province of Quebec from 1920 to 1960. He holds a bachelor’s degree in economics and political science from the Université de Montréal. He has also studied in the United States at the Washington Centre for Academic Seminars and Internships. Mr. Geloso has been an intern for the Prime Minister’s cabinet in Ottawa and for the National Post. He has also been the recipient of a fellowship from the Institute for Humane Studies and an international mobility bursary from the Ministère des Relations internationales du Québec. Currently, he is an economist at the Montreal Economic Institute.

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