James Cust

Research

Working papers, publications, books, and policy outputs on natural resources, the presource curse, critical minerals, and industrial policy in developing countries.

Papers

Working papers and publications listed together. Filter by status to separate them.

Status

Topic

Published ResourcesEnvironment 2023

Public Governance versus Corporate Governance: Evidence from Oil Drilling in Forests

James Cust, Torfinn Harding, Hanna Krings, Alexis Rivera-Ballesteros

satellite dataspatial analysis

Oil extraction in tropical forests raises critical questions about environmental governance. Using satellite data on forest cover combined with the locations of oil wells, we compare the deforestation impacts of oil drilling across countries with different levels of public governance and across firms with different corporate governance standards. We find that public governance quality is the primary determinant of whether oil drilling leads to deforestation — corporate commitments matter less when state regulation is weak.

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Working Paper GrowthConvergence 2023

Are the Poorest Catching Up?

James Cust, Paul Collier, Alexis Rivera-Ballesteros

cross countrypanel data

Economic convergence — the idea that poorer countries grow faster and catch up with richer ones — is a foundational prediction of growth theory. We examine whether the poorest countries, particularly in Sub-Saharan Africa, are in fact converging. Using updated cross-country data, we find that convergence is conditional on institutional quality and policy environments, and that many of the poorest countries remain trapped in low-growth equilibria.

View paper WB PRWP ↗

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 ResourcesDutch Disease 2022

Dutch Disease and the Public Sector

James Cust, Shantayanan Devarajan, Pierre Mandon

panel datacross country

We extend the analysis of Dutch Disease to examine the role of the public sector. Using cross-country data, we show that government spending patterns during resource booms amplify Dutch Disease effects. Public sector wage increases and non-tradable spending crowd out the private sector, reinforcing the mechanisms through which resource wealth undermines manufacturing competitiveness.

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Working Paper ResourcesFiscal Policy 2022

Resource-Backed Loans in Sub-Saharan Africa

David Mihalyi, Jieun Hwang, Diego Rivetti, James Cust

case studycross country

Resource-backed loans — where future resource revenues serve as collateral for sovereign borrowing — have become an important source of finance for resource-rich developing countries. We document the scale and structure of these arrangements in Sub-Saharan Africa and assess their implications for fiscal sustainability, transparency, and debt management.

View paper WB PRWP ↗

Working Paper ResourcesPresource Curse 2020

Natural Resource Discoveries, Citizen Expectations and Household Decisions

James Cust, Justice Tei Mensah

diff in diffsurvey data

Giant oil and gas discoveries reshape citizen expectations about the future, with consequences for household economic decisions. Using household survey data from Ghana and Mozambique, we show that discoveries lead to changes in saving, consumption, and labour supply — even before any revenues arrive. These anticipation effects at the household level mirror the macroeconomic presource curse documented in earlier work.

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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Published ResourcesDutch Disease 2019

Dutch Disease Resistance: Evidence from Indonesian Firms

James Cust, Torfinn Harding, Pierre-Louis Vezina

firm level datapanel data

Resource booms are often associated with Dutch Disease — the appreciation of the real exchange rate and decline of the manufacturing sector. We use firm-level data from Indonesia to study whether firms can resist Dutch Disease effects. We find that firms with greater access to imported intermediates, foreign ownership, and export orientation are better able to withstand the competitive pressures of a resource boom, suggesting that openness and integration into global value chains can mitigate Dutch Disease.

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Working Paper ResourcesPresource Curse 2017

Evidence for a Presource Curse? Saving and Investment Responses to Giant Oil Discoveries

James Cust, David Mihalyi

diff in diffevent study

Giant oil and gas discoveries provide an opportunity to study the response of economic agents to large anticipated income windfalls. We use a new dataset of giant oil and gas discoveries to show that consumption rises, saving falls and investment in non-resource tradables declines in the years following a discovery — well before any revenues arrive. These pre-resource boom dynamics are consistent with rational forward-looking behaviour, but contribute to a deterioration in macroeconomic fundamentals that can seed a subsequent resource curse.

View paper WB PRWP ↗ Lab page ↗

Working Paper ResourcesClimate 2017

Stranded Nations? The Climate Policy Implications for Fossil Fuel-Rich Developing Countries

David Manley, James Cust, Giorgia Cecchinato

scenario analysis

Climate policies aimed at limiting global warming to 2°C imply that a significant share of the world's fossil fuel reserves must remain unburned. We examine the implications for fossil fuel-rich developing countries — potential 'stranded nations' — whose subsoil assets may become commercially unviable. We estimate the scale of stranded asset risk by country and discuss policy options for managing the transition.

View paper SSRN ↗

Published ResourcesInfrastructure 2015

Investing in Africa's Infrastructure: Financing and Policy Options

Paul Collier, James Cust

policy analysis

Africa faces a large and growing infrastructure deficit that constrains economic growth. We examine the financing options available to African governments, including natural resource revenues, sovereign borrowing, and public-private partnerships. We argue that resource-rich countries have a unique opportunity to use anticipated natural resource revenues to finance infrastructure investment, but that institutional safeguards are essential to prevent waste and corruption.

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Published ResourcesLocal Development 2015

The Local Economic Impacts of Natural Resource Extraction

James Cust, Steven Poelhekke

literature review

We review the growing literature on the subnational economic impacts of natural resource extraction. While much of the resource curse literature focuses on cross-country comparisons, a newer body of work examines impacts at the local level — including employment, income, migration, and public service provision in communities near extraction sites. We synthesise the evidence and identify key mechanisms through which local economies are affected.

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Published ClimatePolicy 2009

Using Intermediate Indicators: Lessons for Climate Policy

James Cust

policy analysis

Climate policy relies on measurable indicators to track progress toward emission reduction targets. This paper examines the use of intermediate indicators — metrics that capture progress along the causal chain between policy implementation and final outcomes. Drawing on examples from energy and environmental policy, I discuss how intermediate indicators can improve policy design and evaluation.

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Published EnergyClimate 2008

Space and Time: Wind in an Investment Planning Model

Karsten Neuhoff, Andreas Ehrenmann, Lucy Butler, James Cust, Harvey Hoexter, Kim Keats, Adam Kreczko, Graham Sinden

simulation model

We develop an investment planning model that incorporates the spatial and temporal variability of wind power. The model captures the costs of intermittency and transmission constraints, allowing planners to evaluate the optimal mix of wind capacity across locations. Our results show that geographic diversification of wind farms significantly reduces integration costs.

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Books & Chapters

Books, edited volumes, and book chapters.

Book Critical MineralsResources 2025

Mineral Resources of Africa

James Cust, World Bank Group

World Bank Group

Examines Africa's mineral wealth and its significance in the global clean energy transition, assessing the continent's rich endowment of twenty-six key minerals, the role of AI in exploration, the need for stronger geoscientific data systems, and opportunities for attracting responsible investment through balanced regulatory frameworks.

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Edited Volume ResourcesIndustrial Policy 2023

Africa's Resource Future: Harnessing Natural Resources for Economic Transformation during the Low-Carbon Transition

James Cust, Albert Zeufack

World Bank Group

This edited volume brings together leading researchers and practitioners to examine how African countries can harness their natural resource wealth for sustainable economic transformation. Spanning fiscal policy, governance, local content, environmental management, and the energy transition, the book provides evidence-based guidance for policymakers navigating the dual challenge of resource management and low-carbon development.

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Edited Volume ResourcesWealth Accounting 2021

The Changing Wealth of Nations 2021: Managing Assets for the Future

James Cust, Grzegorz Peszko · eds. World Bank

World Bank Group

The flagship World Bank report on comprehensive wealth accounting across countries. This edition introduces updated measures of natural capital, produced capital, human capital, and net foreign assets for 146 countries. It reveals that many nations — particularly in Sub-Saharan Africa — are depleting natural capital faster than they are accumulating other forms of wealth, raising fundamental questions about the sustainability of current growth paths.

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Policy Work

Policy briefs, reports, and background notes.

Policy Brief Threats to Growth Lab Resources 2026

What is the Presource Curse and How Can Countries Avoid It?

Ghana · Mozambique · Senegal · Malawi

An accessible explainer on the presource curse — how countries can experience economic damage in the years between a giant oil or gas discovery and the first revenues. Draws on case studies from Ghana, Mozambique, Senegal, and Malawi.

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Policy Brief World Bank Blogs Resources 2025

Africa's Natural Resources: Engine for Economic Transformation

Blog post examining how Africa's untapped natural resource potential could drive economic transformation, drawing on evidence from the World Bank's Africa's Resource Future report. Discusses the policy conditions under which resource wealth can support rather than undermine diversification and long-run growth.

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Policy Brief IMF Finance & Development Resources 2017

The Presource Curse

An accessible explanation of the presource curse — how countries can suffer economic damage from oil and gas discoveries years before any revenues arrive. Published in the IMF's flagship policy magazine, the article draws on cross-country evidence to show how elevated expectations, premature borrowing, and real exchange rate appreciation can undermine growth prospects.

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Report Natural Resource Governance Institute Resources 2014

The Natural Resource Charter: A Framework for Good Governance

A comprehensive framework for good governance of natural resource wealth, structured around twelve precepts covering the full decision chain from the decision to extract through to the sustainable use of revenues. Developed as a practical tool for policymakers, parliamentarians, and civil society in resource-rich countries.

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