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The resource curse revisited: governance and natural resources

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  • Matthias Busse
  • Steffen Gröning

Abstract

The paper analyzes the impact of natural resource abundance on selected governance indicators. We use a panel data set with observations on a large number of countries over an extended period of time and employ an instrumental variable technique to account for endogeneity. The results show that exports of natural resources have, above all, led to an increase in corruption. This result is robust to both different model specifications and an alternative indicator for natural resource abundance. For other governance indicators, such as law and order and bureaucratic quality, we either find no results or results that lack robustness. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Matthias Busse & Steffen Gröning, 2013. "The resource curse revisited: governance and natural resources," Public Choice, Springer, vol. 154(1), pages 1-20, January.
  • Handle: RePEc:kap:pubcho:v:154:y:2013:i:1:p:1-20
    DOI: 10.1007/s11127-011-9804-0
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    More about this item

    Keywords

    F10; O13; Q32; Natural resources; Resource curse; Corruption; Governance;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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