Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings

Contents:

Author Info

Abstract

We critically evaluate the empirical basis for the so-called resource curse and find that, despite the topic’s popularity in economics and political science research, this apparent paradox is a red herring. The most commonly used measure of ‘resource abundance’ can be more usefully interpreted as a proxy for ‘resource dependence’—endogenous to underlying institutional factors. In multiple estimations that combine resource abundance and dependence, institutional and constitutional variables, we find that (i) resource abundance, constitutions and institutions determine resource dependence, (ii) resource dependence does not affect growth, and (iii) resource abundance positively affects growth and institutional quality.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cer.ethz.ch/research/wp_06_61.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 06/61.

as in new window
Length: 38 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:eth:wpswif:06-61

Contact details of provider:
Postal: Zürichbergstrasse 18, ZUE, CH-8092 Zürich
Phone: +41 44 632 03 87
Fax: +41 44 632 13 62
Email:
Web page: http://www.cer.ethz.ch
More information through EDIRC

Related research

Keywords: Natural resource curse; economic growth; growth regressions; political regimes; institutions; constitutions;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2004. "Institutions and the Resource Curse," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c009_012, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," NBER Working Papers 9106, National Bureau of Economic Research, Inc.
  3. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, Elsevier, vol. 61(2), pages 527-542, April.
  4. Robinson, James A & Torvik, Ragnar & Verdier, Thierry, 2002. "Political Foundations of the Resource Curse," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3422, C.E.P.R. Discussion Papers.
  5. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1737, C.E.P.R. Discussion Papers.
  6. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
  7. Davis, Graham A., 1995. "Learning to love the Dutch disease: Evidence from the mineral economies," World Development, Elsevier, Elsevier, vol. 23(10), pages 1765-1779, October.
  8. Torsten Persson, 2005. "Forms of Democracy, Policy and Economic Development," NBER Working Papers 11171, National Bureau of Economic Research, Inc.
  9. Arvind Subramanian & Xavier Sala-i-Martin, 2003. "Addressing the Natural Resource Curse," IMF Working Papers 03/139, International Monetary Fund.
  10. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, Elsevier, vol. 45(4-6), pages 847-859, May.
  11. Atkinson, Giles & Hamilton, Kirk, 2003. "Savings, Growth and the Resource Curse Hypothesis," World Development, Elsevier, Elsevier, vol. 31(11), pages 1793-1807, November.
  12. Matsen, Egil & Torvik, Ragnar, 2005. "Optimal Dutch disease," Journal of Development Economics, Elsevier, Elsevier, vol. 78(2), pages 494-515, December.
  13. Papyrakis, Elissaios & Gerlagh, Reyer, 2004. "The resource curse hypothesis and its transmission channels," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 181-193, March.
  14. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 22-46, March.
  15. Lederman, Daniel & Maloney, William F., 2003. "Trade structure and growth," Policy Research Working Paper Series 3025, The World Bank.
  16. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  17. repec:fth:stanho:e-92-3 is not listed on IDEAS
  18. Sheetal K. Chand & Karl Ove Moene, 1997. "Controlling Fiscal Corruption," IMF Working Papers 97/100, International Monetary Fund.
  19. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
  20. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," World Bank Economic Review, World Bank Group, World Bank Group, vol. 19(2), pages 141-174.
  21. Dilip Mookherjee, 1997. "Wealth Effects, Incentives and Productivity," Boston University - Institute for Economic Development, Boston University, Institute for Economic Development 77, Boston University, Institute for Economic Development.
  22. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, Springer, vol. 1(1), pages 1-27, March.
  23. Eric Neumayer, 2003. "Does the ‘Resource Curse’ hold for Growth in Genuine Income as well?," Others, EconWPA 0312002, EconWPA, revised 18 May 2004.
  24. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, Elsevier, vol. 59(1), pages 43-76, June.
  25. Simeon Djankov & José G. Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Working Papers 257, Barcelona Graduate School of Economics.
  26. Torsten Persson & Guido Tabellini, 2004. "Constitutional Rules and Fiscal Policy Outcomes," American Economic Review, American Economic Association, American Economic Association, vol. 94(1), pages 25-45, March.
  27. Jørgen Juel Andersen & Silje Aslaksen, 2006. "Constitutions and the resource curse," Working Paper Series, Department of Economics, Norwegian University of Science and Technology 7506, Department of Economics, Norwegian University of Science and Technology.
  28. Clarida, Richard H & Findlay, Ronald, 1992. "Government, Trade, and Comparative Advantage," American Economic Review, American Economic Association, American Economic Association, vol. 82(2), pages 122-27, May.
  29. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
  30. Beck, T.H.L. & Clarke, G. & Groff, A. & Keefer , P. & Walsh, P., 2001. "New tools in comparative political economy: The database of political institutions," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125517, Tilburg University.
  31. Adam Przeworski & Fernando Limongi, 1993. "Political Regimes and Economic Growth," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 7(3), pages 51-69, Summer.
  32. Xavier Sala-i-Martín & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 685, Department of Economics and Business, Universitat Pompeu Fabra.
  33. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers, Harvard - Institute for International Development 517a, Harvard - Institute for International Development.
  34. Kenneth L. Sokoloff & Stanley L. Engerman, 2000. "Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 217-232, Summer.
  35. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 379-399, June.
  36. Durham, J Benson, 1999. " Economic Growth and Political Regimes," Journal of Economic Growth, Springer, Springer, vol. 4(1), pages 81-111, March.
  37. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, Elsevier, vol. 33(7), pages 1029-1044, July.
  38. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  39. Catherine Norman, 2009. "Rule of Law and the Resource Curse: Abundance Versus Intensity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 43(2), pages 183-207, June.
  40. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(4), pages 725-753, August.
  41. Ning Ding & Barry C. Field, 2005. "Natural Resource Abundance and Economic Growths," Land Economics, University of Wisconsin Press, vol. 81(4).
  42. Davis, Graham A, 1998. "The minerals sector, sectoral analysis, and economic development," Resources Policy, Elsevier, Elsevier, vol. 24(4), pages 217-228, December.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. A Maldição dos Recursos Naturais
    by Leonardo Monasterio in Blog do Leonardo Monasterio on 2007-06-08 08:06:00
  2. The Natural Resource Curse
    by Leonardo Monasterio in Leonardo Monasterio's Blog on 2007-06-08 07:52:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eth:wpswif:06-61. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.