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Resource abundance vs. resource dependence in cross-country growth regressions

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  • Annika Kropf

Abstract

Having analysed the macroeconomic performance of large oil exporters, I found that, in many cases, rents from natural resources have been successfully used to enhance economic growth. Nevertheless, adherents of the 'resource curse' seem to have found ample evidence suggesting that resource-abundant countries grow slower than resource-poor countries. A review of empirical research on the 'resource curse' reveals that the variables used were usually proxies for resource dependence. These variables introduce a bias, making less developed economies per se more resource 'abundant' than developed economies. As a consequence, a new variable, not containing any information on a country's stage of development, was introduced. Comparing the variables on resource dependence and resource abundance in a model by Sachs and Warner, resource abundance was not significant. In a new model, resource abundance was even positively correlated with growth. Copyright 2010 The Author. Journal compilation 2010 Organization of the Petroleum Exporting Countries.

Suggested Citation

  • Annika Kropf, 2010. "Resource abundance vs. resource dependence in cross-country growth regressions," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 34(2), pages 107-130, June.
  • Handle: RePEc:bla:opecrv:v:34:y:2010:i:2:p:107-130
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    References listed on IDEAS

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    1. Neumayer, Eric, 2004. "Does the "Resource Curse" hold for Growth in Genuine Income as Well?," World Development, Elsevier, vol. 32(10), pages 1627-1640, October.
    2. Thorvaldur Gylfason & Gylfi Zoega, 2006. "Natural Resources and Economic Growth: The Role of Investment," The World Economy, Wiley Blackwell, vol. 29(8), pages 1091-1115, August.
    3. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2006. "Political foundations of the resource curse," Journal of Development Economics, Elsevier, vol. 79(2), pages 447-468, April.
    4. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    5. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    6. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    7. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
    8. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Educational Studies, Higher School of Economics, issue 1, pages 154-193.
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    Cited by:

    1. Havranek, Tomas & Horvath, Roman & Zeynalov, Ayaz, 2016. "Natural Resources and Economic Growth: A Meta-Analysis," World Development, Elsevier, vol. 88(C), pages 134-151.
    2. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    3. repec:kap:policy:v:50:y:2017:i:2:d:10.1007_s11077-017-9288-y is not listed on IDEAS

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