Approaches to deal with a Dutch Disease : A Systematic Review

Abstract

The Dutch disease model was broadly applied in the past on different countries and causing sources creating revenues (Benjamin et al., 1987; Corden, 2012; Égert, 2012; Fardmanesh, 1991; Larsen, 2006; Niftiyev and Czech, 2020; van der Ploeg and Venables, 2013; Zhang et al., 2021). In reference to the question of how countries and governments can successfully deal with resource deposits, Werner (2012) shows that national resource funds are an opportunity to overcome the possible strongly negative economic development. This presented chapter conducts a systematic literature review with empirical studies that deal with countries facing occurring or possible occurring Dutch disease because of resource deposits like minerals or oil. It shows that, industrial diversification, a favourable business environment, attracted domestic and foreign investment in the industrial and agricultural sectors as well as good institutional quality are recommended to prevent a Dutch Disease.