How much of economic growth trickles down to the population in resource-rich countries? evidence from Papua New Guinea

Abstract

There has been substantial growth in the resource sector in PNG during the last resource boom and significant increases in international assistance, both of which might have translated into improved well-being outcomes across the country. To better understand whether these changes improved household-level outcomes, we update estimates of key well-being outcomes in the country. Specifically, we impute monetary poverty status using non-monetary indicators in the 2016–18 Demographic and Health Survey and estimate the World Bank’s Multidimensional Poverty Measure. Despite the significant growth since 2009, monetary poverty and access to several essential services hardly changed, which stands in stark contrast to the substantial improvement across the rest of the world and other comparison regions over the same period. Combined, the results illustrate that it is possible that very little resource-led growth trickles down to the population and that the link between macroeconomic and microeconomic outcomes is more tenuous in PNG than found in other resource-intensive settings.