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The Rentier Predatory State Hypothesis: An Empirical Explanation Of The Resource Curse

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  • KHALID R. ALKHATER

    ()
    (Qatar Central Bank and Georgetown University, Qatar)

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    Abstract

    This paper introduces an empirical growth model that explains the perplexing observed growth resource regime dubbed the resource curse. The main hypothesis advanced in this paper, the rentier predatory state hypothesis, holds that under autocracy, the interaction between political power and resource abundance is expected to lead to poor economic outcomes in the long run. In the empirical model, resource abundance is allowed to interact with political repression to generate a negative impact on economic growth. Depending on the extent of the repression, a state dependent on natural resources (a rentier state) can also become a predatory state, i.e., a rentier predatory state, or, in other words, a rentier state with a high rate of political repression. The resulting net effect of resource abundance on economic growth is contingent on the extent of the repression, and a resource-abundant state with a sufficiently high rate of political repression will have negative economic growth, while a state with a low to moderate rate of political repression will have positive economic growth.

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    Bibliographic Info

    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 37 (2012)
    Issue (Month): 4 (December)
    Pages: 29-60

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    Handle: RePEc:jed:journl:v:37:y:2012:i:4:p:29-60

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    Related research

    Keywords: Rentier Predatory State; Political Repression; Economic Growth; Resource Curse; Developing Countries;

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    1. Xavier Sala-i-Martin & Arvind Subramanian, 2003. "Addressing the Natural Resource Curse: An Illustration from Nigeria," NBER Working Papers 9804, National Bureau of Economic Research, Inc.
    2. Rabah Arezki & Frederik van der Ploeg, 2007. "Can the Natural Resource Curse Be Turned Into a Blessing? T+L3479he Role of Trade Policies and Institutions," IMF Working Papers 07/55, International Monetary Fund.
    3. Sergio T. Rebelo, 1990. "Long Run Policy Analysis and Long Run Growth," NBER Working Papers 3325, National Bureau of Economic Research, Inc.
    4. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
    5. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
    6. Rabah Arezki & Frederick van der Ploeg, 2007. "Can the Natural Resource Curse Be Turned into a Blessing? The Role of Trade Policies and Institutions," Economics Working Papers ECO2007/35, European University Institute.
    7. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
    8. Heinz Welsch, 2008. "Resource Dependence, Knowledge Creation, And Growth: Revisiting The Natural Resource Curse," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(1), pages 45-70, June.
    9. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," NBER Working Papers 7750, National Bureau of Economic Research, Inc.
    10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    11. Asfaha, Samuel, 2007. "National Revenue Funds: Their Efficacy for Fiscal Stability and Intergenerational Equity," MPRA Paper 7656, University Library of Munich, Germany.
    12. Brunnschweiler, Christa N., 2008. "Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth," World Development, Elsevier, vol. 36(3), pages 399-419, March.
    13. Stijns, Jean-Philippe C., 2005. "Natural resource abundance and economic growth revisited," Resources Policy, Elsevier, vol. 30(2), pages 107-130, June.
    14. Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1042-67, December.
    15. Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse," IMF Working Papers 03/139, International Monetary Fund.
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