The Varieties of Resource Experience: How Natural Resource Export Structures Affect the Political Economy of Economic Growth
AbstractMany oil, mineral, and plantation crop-based economies experienced a substantial deceleration of growth since the commodity boom and bust of the 1970s and early 1980s. Rodrik (1999) has demonstrated that the magnitude of a country’s growth deceleration since the 1970s is a function of both the magnitude of the shocks and a country’s “social capability” for adapting to shocks. In this paper, we demonstrate that in this respect countries, with what we term “point source” natural resource exports are doubly disadvantaged. Not only are countries with these types of exports exposed to terms of trade shocks, but the institutional capability for responding to shocks is itself endogenous and negatively related to export composition. Using two different sources of export data and classifications of export composition, we show that point source and coffee/cocoa exporting countries do worse across an array of governance indicators (controlling for a wide array of other potential determinants of governance). This is not just a function of being a “natural resource” exporter, as countries with natural resource exports that are “diffuse” do not show the same strong differences—and have had more robust growth recoveries.
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Bibliographic InfoPaper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0308.
Length: 38 pages
Date of creation: Apr 2003
Date of revision:
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economic growth; institutions; natural resource endowment;
Other versions of this item:
- Lant Pritchett & Michael Woolcock & Gwen Busby & Jonathan Isham, 2004. "The Varieties of Resource Experience: How Natural Resource Export Structures Affect the Political Economy of Economic Growth," Middlebury College Working Paper Series 0308r, Middlebury College, Department of Economics.
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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