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Resource concentration, institutional quality and the natural resource curse

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  • Oskenbayev, Yessengali
  • Yilmaz, Mesut
  • Abdulla, Kanat

Abstract

Employing panel data from 14 regions in Kazakhstan, this investigation aims to discover the effect of energy (point-source) and agricultural (diffuse) resource abundance on economic growth through institutional quality. A fixed effects panel data model and Roger's standard errors model are used to consider the possible endogeneity problem. Kazakhstan has two major export products, oil (point-source) and wheat (diffuse), and in theory these two products have different impacts on growth. Auty (1997), Woolcock et al. (2001) and Isham et al. (2005) found that it is the composition of resources, rather than any kind of natural resource, which is problematic for economic growth. The novelty of this research is that the natural resource endowments are considered as a nonlinear function of institutional quality. In contrast to others, we observe that it is not the type of natural resources that breeds economic failure, but rather their “overabundant” or excess production that is often associated with rent-seeking activities.

Suggested Citation

  • Oskenbayev, Yessengali & Yilmaz, Mesut & Abdulla, Kanat, 2013. "Resource concentration, institutional quality and the natural resource curse," Economic Systems, Elsevier, vol. 37(2), pages 254-270.
  • Handle: RePEc:eee:ecosys:v:37:y:2013:i:2:p:254-270
    DOI: 10.1016/j.ecosys.2012.11.001
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    Cited by:

    1. repec:pal:compes:v:59:y:2017:i:3:d:10.1057_s41294-017-0028-2 is not listed on IDEAS
    2. Karimov, Aziz & Oskenbayev, Yessengali, 2013. "Is Kazakhstan Vulnerable to Natural Resource Curse?," WIDER Working Paper Series 130, World Institute for Development Economic Research (UNU-WIDER).
    3. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    4. Frey, Daniel & Frey, Miriam & Wieslhuber, Carmen, 2013. "Do natural resources define convergence clubs? Empirical evidence from the Kazakh regions," Economic Systems, Elsevier, vol. 37(3), pages 404-414.
    5. repec:taf:pocoec:v:28:y:2016:i:3:p:314-334 is not listed on IDEAS

    More about this item

    Keywords

    Natural resource abundance; Dutch disease; Kazakhstan;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • P5 - Economic Systems - - Comparative Economic Systems

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