School of Economics

2016 Discussion papers

School of Economics Discussion Paper 16/09

Government Spending Multipliers in Natural
Resource-Rich Developing Countries

Jean-Pascal Nganou, Juste Somé and Guy Tchuente
World Bank, Independent Consultant and University of Kent

September 2016


This paper estimates government spending multiplier for natural resource-rich low-income countries (LICs). Our estimates suggest an absence of natural resource curse in government spending multiplier. In the short-run, the government spending multiplier is around 0.7 for natural resource-rich LICs and 0.43 for all LICs. The government spending has a permanent impact on the real economic activity in resource-rich countries while having a transitory long-run impact in other countries.

JEL Classification:
E62; O23

Keywords: Government spending multipliers; fiscal policy; natural resources

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