Print
Share
If There Was Ever a Case for Oil2Cash, It’s Post-Qaddafi Libya
March 4, 2011
The idea of cash transfers—or just giving money to the poor—is gaining ground quickly. The use of conditional cash transfers as a way to assist the poor have shown pretty impressive results in Mexico and Brazil, leading to lots of other copycat programs in dozens of countries. Iran, and now India, are replacing inefficient and costly subsidies of basic goods with cash payments.
Our Oil2Cash initiative has been exploring whether cash transfers might be a good way to prevent the more harmful effects of the resource curse. We have been looking at several countries (Ghana and Iraq are here, and more country cases on the way). My colleague Arvind Subramanian argues now might be the time for this approach in the Middle East too. But of all the countries I have looked at, the case seems more obviously to apply in Libya. Here’s my Foreign Policy piece today on post-Libya Qaddafi that makes that case:
The cash-transfer model involves a leap of faith: the bet that people know better than bureaucrats how to use their money. This has made direct payments politically attractive to both the populist left and the libertarian right. What better way to push “power to the people” than to give them the money that was the source of elite dominance and corruption in the first place?
Possibly Related Posts
- A Constitutional Moment: Oil2Cash in the Arab World
- Oil to Cash: An Idea to Fight the Resource Curse
One Response to “If There Was Ever a Case for Oil2Cash, It’s Post-Qaddafi Libya”
Post a Comment
We value frank and constructive exchanges and encourage you to use your real name in your comments.
March 6th, 2011 at 10:10 pm
I should really read your paper, but I’m sort of busy, so I’ll ask you here. I get the part about the people spending resource rents better than the state; that makes a lot of sense. But what about the “other” resource curse, i.e. the affect of resource rents on the tradable sector? My understanding of Dutch Disease is that because of what rent does to a) exchange rates and b) wages/prices in the non-tradable goods sector, resource rents basically kill of a country’s tradable goods sector. Does Oil2Cash do anything to help this?