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This policy paper for the world bank addresses the question of whether countries consider their mineral wealth an asset, to be used to stimulate or enhance their economic growth potential, or are there reasons to steer an economy away from the development of the mineral sector?Reviewing the cases of 51 “mining countries” in the developing world, three conclusions can be drawn:First, in more cases than not, mining countries appear to fare better than other countries in their respective regions. Second, where they do fare well, their good performance appears to be associated mostly with institutional stability and overall good economic management, particularly that relating to the management of revenues from the mining sector and the management of the sector itself.Third, the need to build institutional stability and improve economic management is most urgent in countries where the mining sector dominates an economy and where poor economic management and weak institutions are persistent features.In contrast to some analyses, this paper finds no reason to assume a causal relationship between a dominant mining sector and overwhelming economic ills. Nonetheless, it acknowledges the need to take special steps to prevent vested interests from expropriating mining and mineral resources that could otherwise be used to create economic assets for future generations. To these ends, the paper emphasises the need for policymakers to design and strengthen general economic policies and institutions for financial management, as well as specific frameworks and institutions for the mining sector.The challenge the author identifies is to turn the national endowment of mineral resources into national wealth. In this regard, there are lessons to be learned for other mining countries from both the “worst of class”and “best of class” performers profiled in this study. [authors summary]
