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Resource concentration, institutional quality and the natural resource curse

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  • Oskenbayev, Yessengali
  • Yilmaz, Mesut
  • Abdulla, Kanat

Abstract

Employing panel data from 14 regions in Kazakhstan, this investigation aims to discover the effect of energy (point-source) and agricultural (diffuse) resource abundance on economic growth through institutional quality. A fixed effects panel data model and Roger's standard errors model are used to consider the possible endogeneity problem. Kazakhstan has two major export products, oil (point-source) and wheat (diffuse), and in theory these two products have different impacts on growth. Auty (1997), Woolcock et al. (2001) and Isham et al. (2005) found that it is the composition of resources, rather than any kind of natural resource, which is problematic for economic growth. The novelty of this research is that the natural resource endowments are considered as a nonlinear function of institutional quality. In contrast to others, we observe that it is not the type of natural resources that breeds economic failure, but rather their “overabundant” or excess production that is often associated with rent-seeking activities.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 37 (2013)
Issue (Month): 2 ()
Pages: 254-270

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Handle: RePEc:eee:ecosys:v:37:y:2013:i:2:p:254-270

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Keywords: Natural resource abundance; Dutch disease; Kazakhstan;

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Cited by:
  1. Oskenbayev, Yessengali & Karimov, Aziz, 2013. "Is Kazakhstan vulnerable to natural resource curse?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Miriam Frey & Carmen Wieslhuber & Daniel Frey, 2013. "Do Natural Resources Define Convergence Clubs? Empirical Evidence from the Kazakh Regions," Working Papers 329, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).

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