“One Thing Leads to Another” – Commodities, Linkages and Industrial Development: A Conceptual Overview (Revised)
African commodity exporting economies have benefitted greatly from the commodities boom of the past decade. This raises the possibility of commodity based industrialization path for these economies. However the conventional wisdom warns of the great dangers of relying on resource rents, amongst which are the fact that the capital intensive nature of many commodities sectors limits employment and the distribution of these rents. The paper challenges this pessimistic „resource curse‟ argument and sets out the conceptual reasons arguing that the strengthening of linkages to the commodities sector is an important avenue for industrial development. It sets out a general model of linkages between industry and services and the commodities sector which distinguishes between win-win and win-lose outcomes. The paper concludes with a brief review of the reasons why Governments might wish to intervene to support linkages between the commodities and the industrial and service sectors.