Resource curse: new evidence on the role of institutions
AbstractThis paper attempts to provide a probable answer to a longstanding resource curse puzzle; i.e., why resource-rich nations grow at a slower rate compared to less fortunate ones. Using an innovative threshold estimation technique, the empirical results reveal that there is a threshold effect in the natural resources – economic growth relationship. We find that the impact of natural resources is meaningful to economic growth only after a certain threshold point of institutional quality has been attained. The results also shed light on the fact that the nations that have low institutional quality depend heavily on natural resources while countries with high quality institutions are relatively less dependent on natural resources to generate growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37206.
Date of creation: Feb 2012
Date of revision:
Economic development; Natural resource curse; Institutions;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-CIS-2012-03-21 (Confederation of Independent States)
- NEP-CWA-2012-03-21 (Central & Western Asia)
- NEP-ENV-2012-03-21 (Environmental Economics)
- NEP-PKE-2012-03-21 (Post Keynesian Economics)
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