Oil, Economic Diversification, and Development in the Arab World - Economic Research Forum (ERF)

Oil, Economic Diversification, and Development in the Arab World

Ibrahim Elbadawi and Alan Gelb

December, 2010

PRR 35

68 pages

Q4. Energy
E. Macroeconomics and Monetary Economics
O1. Economic Development

This report aims at providing ERF with a sound basis for selecting and designing a research program over the next three to five years for one of the major themes of the initiative – oil management and economic diversification.

An earlier version of this report was presented at the workshop on “Natural Resources and Economic Diversification: Towards a Research Agenda for ERF”, held in Cairo in November 2009. The draft was subsequently revised thanks to, among others, the valuable comments from the conference participants.

The report undertakes a review of the literature on the oil curse and economic diversification- two issues of vital relevance to the development of the Arab world. Not surprisingly agreeing with the with the near-consensus view that the curse is real but is not destiny, the report proposes a number of priorities for a future policy-relevant research agenda on the above two broad themes.

First, the macro-institutional issues for escaping the oil curse; and consequently the strategies for escaping it; or in other words, the plan for harnessing the oil resource for long-term development of the Arab world.

Second, the micro-institutional issues of economic diversification, where the report addresses some pivotal questions, such as why and how to diversify, and for what development objectives?

Research Fellows

Ibrahim Elbadawi

Managing Director, Economic Research Forum

Alan Gelb



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