University of Oxford · World Bank

University of Oxford · World Bank

James Cust

Development Economist

I study the economic consequences of natural resource discoveries — and why so many resource-rich countries grow slower than they should.

Research

Selected Research

Featured working papers and publications. View all →

Working Paper ResourcesGrowth 2022

The Dog that Didn't Bark: The Missed Opportunity of Africa's Resource Boom

James Cust, Alexis Rivera Ballesteros, Albert Zeufack

cross countrypanel data

The commodity super-cycle of the 2000s and 2010s delivered a massive windfall to resource-rich Africa. Yet the expected structural transformation did not materialise. We document that, despite record resource revenues, most African resource exporters failed to diversify their economies, invest in human capital, or build the institutional foundations for sustained growth. The boom was a missed opportunity — the dog that didn't bark.

View paper WB PRWP ↗
Published ResourcesInstitutions 2020

Institutions and the Location of Oil Exploration

James Cust, Torfinn Harding

spatial analysisborder discontinuity

We investigate the role of institutions in determining where oil exploration takes place. Using a global dataset of oil wells and a border-discontinuity design, we show that institutional quality strongly influences the location of exploration activity. Countries with weaker institutions explore less of their territory, missing potential discoveries. The results suggest that the resource curse may begin before extraction — with institutional quality determining whether resources are even found.

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Working Paper ResourcesPresource Curse 2017

Evidence for a Presource Curse? Oil Discoveries, Elevated Expectations, and Growth Disappointments

James Cust, David Mihalyi

diff in diffevent study

Oil discoveries can constitute a major positive shock to economic activity, but may also be detrimental to growth over the long run. This paper utilises a new methodology for estimating growth underperformance to examine the extent to which discoveries depress the growth path of a country following a discovery and prior to production starting. We find causal evidence of a significant negative effect on short-run growth in countries with weak institutions, creating growth disappointments prior to resource windfalls — an effect termed the presource curse. For a giant oil or gas discovery in 1988–2010, we estimate an average growth disappointment of 0.83 percentage points annually over the five years following discovery, rising to 1.77 percentage points for super-giant discoveries. The effect is inversely related to institutional quality, driven by countries with below-threshold institutions; there is no measured growth disappointment for countries with strong institutions.

View paper WB PRWP ↗

Current Work

WB Minerals for Growth regional study

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James Cust

About

Jim Cust is a development economist at the World Bank and affiliated researcher at the University of Oxford. His research focuses on natural resources, critical minerals, the energy transition, and industrial policy in low- and middle-income countries.

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