We study the incentives of selfish governments to tax tradable primary inputs under asymmetric trade. Using an empirically-consistent model of endogenous growth, we obtain explicit links between persistent gaps in productivity growth and the observed tendency of resource-exporting (importing)...

This article utilizes a new concept of supply and demand for raw materials. It emphasizes the need for the use of long run economics rather than short run analysis in the determination of a fair price for raw commodities.