Natural resources and economic policy in developing countries

This paper argues for the need to design broad economic policy instruments to reverse the trend in many developing countries toward increasing degradation and destruction of natural resources. The natural resource base, often critical for economic development, is in many cases threatened by a rapid population growth, the effect of which is compounded by inadequately controlled land and water use.Policy interventions which have a pervasive effect must be established to influence the environmentally-related behavior of countless, relatively small-scale, resource-using activities which take place throughout a nation's economy. Natural resource management should thus become a standard element of macroeconomic and sector analysis, and the physical linkages between sectors need to be critically examined.Governments must overcome major institutional and political obstacles. New approaches, providing incentives and rewards to policy makers, must be developed to increase interagency cooperation while avoiding overlapping jurisdictions and to prevent vested interests from paralyzing new initiatives.The views expressed in this paper are those of the author, and should not be attributed to the World Bank, to its affiliated organizations, or to any individual acting on their behalf. The paper is an adaptation of one presented at the World Conservation Strategy Conference, Ottawa, June 1986. The author is indebted to many colleagues for advice and comments, including R. Ackermann, D. Anderson, N. Myers, D. Pearce, R. Repetto, G. Schramm and E. Schuh.