Intergenerational Versus Intragenerational Equities and the Development of Resource-Rich But Poor Countries: The Case of Ghana

Abstract

The fundamental objective of the paper is to proffer credible and empirical evidence to show that whilst the concept of intergenerational equity may be laudable, the proposition by the intergenerational equity theorists that a reasonable portion of resource revenue ought to be saved in financial instrument is not a prudent policy for the management of natural resource revenue in countries currently experiencing under development.

The paper seeks to argue that basic amenities like education and health, which are currently in huge deficit, must be provided for in the country before a policy for saving of revenue in financial instruments are fashioned out and implemented in Ghana. This stance is buttressed by the legitimate concern that monies be locked up in some financial institutions (mostly of foreign origin) whilst the country borrows huge sums of money from these same foreign sources at huge interest. The intergenerational equity proposition is therefore seen as a principle that is rooted in antiquity.

Recommendations made include the following; that resource-rich but poor countries ought to put in place legal and institutional framework and where they exist they must be resourced and all enforced to ensure that the country derives maximum benefits from resource endowment.  Also, resource-endowed but poor countries ought to sieve policies imposed or introduced by foreign sources like the IMF and the World Bank before adopting and implementing them  in their various countries.

Keywords: Intergenerational equity, Intragenerational equity, developing countries, Resource-Rich but poor countries, Ghana