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Institutions and the resource curse

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Author Info

  • Halvor Mehlum

    (University of Oslo)

  • Karl Moene

    (University of Oslo)

  • Ragnar Torvik

    (NTNU, Trondheim)

Abstract

Countries rich in natural resources constitute both growth losers and growth winners. We claim that the main reason for these diverging experiences is differences in the quality of institutions. More natural resources push aggregate income down, when institutions are grabber friendly, while more resources raise income, when institutions are producer friendly. We test this theory building on Sachs and Warner's influential works on the resource curse. Our main hypothesis: that institutions are decisive for the resource curse, is confirmed. Our results are in sharp contrast to the claim by Sachs and Warner that institutions do not play a role.

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File URL: http://128.118.178.162/eps/dev/papers/0210/0210003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0210003.

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Length: 26 pages
Date of creation: 08 Oct 2002
Date of revision:
Handle: RePEc:wpa:wuwpdc:0210003

Note: Type of Document - pdf; prepared on latex; pages: 26
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Web page: http://128.118.178.162

Related research

Keywords: Natural resources; Institutional quality; Growth; Rent-seeking;

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References

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  1. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1988. "Industrialization and the Big Push," NBER Working Papers 2708, National Bureau of Economic Research, Inc.
  2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  3. Torvik, Ragnar, 2001. "Learning by doing and the Dutch disease," European Economic Review, Elsevier, vol. 45(2), pages 285-306, February.
  4. Acemoglu, Daron & Johnson, Simon & Robinson, James A, 2002. "An African Success Story: Botswana," CEPR Discussion Papers 3219, C.E.P.R. Discussion Papers.
  5. Sachs, J-D & Warner, A-M, 1996. "Sources of Slow Growth in African Economies," Papers 545, Harvard - Institute for International Development.
  6. Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1997. "A Mixed Blessing: Natural Resources and Economic Growth," CEPR Discussion Papers 1668, C.E.P.R. Discussion Papers.
  7. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
  8. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA.
  9. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  10. Stijns, Jean-Philippe C., 2001. "Natural Resource Abundance And Economic Growth Revisited," Berkeley Economics Dissertations-in-Progress Series 25127, University of California, Berkeley, Department of Agricultural and Resource Economics.
  11. Skaperdas, Stergios, 2001. "Warlord Competition," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  12. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
  13. repec:cup:macdyn:v:3:y:1999:i:2:p:204-25 is not listed on IDEAS
  14. Lane, Frederic C., 1958. "Economic Consequences of Organized Violence," The Journal of Economic History, Cambridge University Press, vol. 18(04), pages 401-417, December.
  15. Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1999. "A Mixed Blessing," Macroeconomic Dynamics, Cambridge University Press, vol. 3(02), pages 204-225, June.
  16. Lane, Philip R & Tornell, Aaron, 1996. " Power, Growth, and the Voracity Effect," Journal of Economic Growth, Springer, vol. 1(2), pages 213-41, June.
  17. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
  18. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
  19. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
  20. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, vol. 61(2), pages 527-542, April.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Economic Nature of the Resource Curse: Evidence
    by Daron Acemoglu and James Robinson in Why Nations Fail on 2013-05-21 12:02:00
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  1. Institutions and the Resource Curse (EJ 2006) in ReplicationWiki

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