Natural Resources and Small Island Economies: Mauritius and Trinidad and Tobago. Issue 2 (1st February 2017)

• Record Type: Journal Article
• Authors: Auty, R. M.
• Is Part Of: Journal of development studies. Volume 53:Issue 2(2017)
• Page Start: 264
• Page End: 277
• Publication Date: 2017-02-01
• Subjects: Economic development -- Periodicals; Economic history -- 1945- -- Periodicals; Developing countries -- Economic conditions -- Periodicals; Développement économique -- Périodiques; Histoire économique -- 1945- -- Périodiques; Pays en voie de développement -- Conditions économiques -- Périodiques; 338.91
• DOI: 10.1080/00220388.2016.1160063
• Languages: English
• ISSNs: 0022-0388

Abstract

A bstract: Historically, small economies, especially resource-rich ones, underperformed on average relative to their larger counterparts. Small island economies appear still more disadvantaged due to remoteness from both markets and agglomeration economies. Yet a comparison of two small island economies with similar initial conditions other than their mineral endowment suggests that policy outweighs size, isolation and resource endowment in determining economic performance. Resource-poor Mauritius adopted an unfashionable policy of export manufacturing that systematically eliminated surplus labour, which drove economic diversification that sustained rapid GDP growth and political maturation. Like most resource-rich economies, Trinidad and Tobago pursued policies that absorbed rent too rapidly, which impeded diversification and created an illusory prosperity vulnerable to collapse.