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The Paradox of Plenty: A Meta-Analysis

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  • Dauvin, Magali
  • Guerreiro, David

Abstract

Since Sachs and Warner’s seminal article in 1995, numerous studies have addressed the link between natural resources and economic growth. Although the “resource curse” effect was commonly accepted at first, many articles have challenged its existence, and the results found in the literature are ambiguous. In this paper, we aim to quantitatively review this literature in order to (i) identify the sources of heterogeneity and (ii) assess the impact of natural resources on economic growth. A meta-analysis is performed on 69 empirical studies on the resource curse, totaling 1,419 estimates. Our findings show that (i) only developing countries suffer from the resource curse although it is soft; (ii) the way natural resources are taken into account is crucial to understand the heterogeneity found in the literature; (iii) the negative impact of the volatility of the terms-of-trade on growth should be qualified. An additional MRA performed on indirect effects size also indicate that when institutions are at their best level, the resource curse disappears and may be turned into a blessing.

Suggested Citation

  • Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
  • Handle: RePEc:eee:wdevel:v:94:y:2017:i:c:p:212-231
    DOI: 10.1016/j.worlddev.2017.01.009
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    Keywords

    meta-analysis; resource curse; natural resources; appropriability; institutions;

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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