He cites as an example Chile, which has devoted money made by its copper mines for other productive ends, particularly in agriculture. Using 16 case studies from Africa, Asia and Latin America, he documents how misguided policies and clashes among government agencies have led to results ranging from Indonesia's deforestation to the collapse of the Mexican water system, from the destruction of cocoa farms in Ghana to the waste of Nigeria's oil wealth. For example, if you don't charge the full value of a resource from government lands, it's going to be over-exploited and the money will be wasted and the resource will be wasted. In many cases, though, this view is surprisingly incomplete. The waste of natural resources is a complicated business.
Officials usually know how to price natural resources.
They choose not to for a host of reasons. Problems crop up, though, when natural resources are used to pursue other objectives, such as in Indonesia, where revenues from forestry were used to build aerospace and petrochemical industries. The same, of course, holds for future generations who will suffer the loss of resource wealth and healthy eco-systems. One recommendation for improving the management of such natural resources as forests, land, minerals, oil and water is to put their control back in the hands of the local people. The only thing is, in so many cases, the government has done an even worse job, because it doesn't internalize the cost of poor-resource management.