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Institutions and the resource curse: New insights from causal machine learning

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  • Roland Hodler
  • Michael Lechner
  • Paul A Raschky

Abstract

There is a widely held belief that natural resource rents are a blessing if institutions are strong, but a curse if institutions are weak. We use data from 3,800 Sub-Saharan African districts and apply a causal forest estimator to reassess the relationship between institutions and the effects of resource rents. Consistent with this belief, we document that stronger institutions increase the positive effect of the presence of mining activities on economic development and dampen the negative effect of mining activities on conflict. In contrast, we find that the effects of higher world mineral prices on economic development and conflict in mining districts are non-linear and vary little in institutional quality.

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  • Roland Hodler & Michael Lechner & Paul A Raschky, 2023. "Institutions and the resource curse: New insights from causal machine learning," PLOS ONE, Public Library of Science, vol. 18(6), pages 1-20, June.
    • Handle: RePEc:plo:pone00:0284968
    DOI: 10.1371/journal.pone.0284968
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    References listed on IDEAS

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    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
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    3. Antonio Cabrales & Esther Hauk, 2011. "The Quality of Political Institutions and the Curse of Natural Resources," Economic Journal, Royal Economic Society, vol. 121(551), pages 58-88, March.
    4. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    5. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
    6. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    7. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-573, October.
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    1. Agneman, Gustav & Cappelen, Christoffer & Brandt, Kasper & Sjöberg, David, 2025. "The uneven reach of the state: A novel approach to mapping local state presence," Journal of Development Economics, Elsevier, vol. 174(C).

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