Getting Resource Extraction Right

Paul Collier writes in ANSA:

...as the radically different trajectories of Botswana and Sierra Leone illustrate, growth based on resource exports is critically dependent upon the quality of public choices. A long chain of decisions has to be got right, not just once but repeatedly for a generation. The upstream part of the decision chain involves reconciling strong incentives for prospecting with capturing as much as possible of the resource rents for society. This requires overcoming acute problems of agency, of time-inconsistency, and of asymmetric information. As the Niger Delta and the Gulf of Mexico demonstrate, it also requires the effective restraint of environmental damage.
The downstream part of the decision chain is about harnessing revenues for sustainable growth. Resource revenues need to be treated distinctively: they come from the depletion of a natural asset and should be substantially offset by the accumulation of other assets. The only European model of prudent use of resource revenues is Norway, but the Norwegian model is inapplicable for Africa. Norway has more invested capital per member of the labour force than anywhere else on earth, whereas Africa has less. Hence, whereas it is appropriate for Norway to accumulate foreign financial assets, Africa needs to invest domestically