Development and growth in mineral-rich countries

This chapter offers some cross-country empirical evidence of the linkages among mineral wealth dependence, economic growth and social outcomes. It stresses the importance of social development and social policies to economic growth around the world as well as the interactions among aspects of social capital, human capital and natural capital in the growth process. Apart from education and healthcare, social policy issues have been strangely absent from much of the recent academic debate on economic growth. A relatively small part of the literature that deals with the relationship between income distribution and economic growth is an exception. Some observers fear that income inequality endangers social cohesion, political stability and peace, and may thus spoil the investment climate as well as triggering counterproductive demands for redistribution, thus reducing efficiency and growth. Inequality is the combined result of macroeconomic mechanisms and public policies that influence market outcomes, including the distribution of income.