IDEAS home Printed from https://ideas.repec.org/p/ags/iaae06/25289.html
   My bibliography  Save this paper

Re-testing the Resource Curse Hypothesis Using Panel Data and an Improved Measure of Resource Intensity

Author

Listed:
  • Rambaldi, Alicia N.
  • Hall, Greg
  • Brown, Richard P.C.

Abstract

Most empirical studies of the Resource Curse Hypothesis (RCH) find evidence of a strong negative relationship between a country's natural resource abundance and economic growth. We question the reliability of these findings in relation to the definitions and measures used for both resource intensity and economic growth, and the econometric testing which we consider deficient. We use an alternative, per capita resource rents measure of resource intensity that excludes renewable resources and avoids the circularity and bias of other output-related measures. Using Cluster Analysis, we compare the grouping of countries on the basis of three resource intensity definitions; viz. Sachs and Warner's (1995), Gylfason and Zoega's (2002) and our per capita rents, and find substantial differences in the resulting clustering. We then re-test the RCH econometrically using panel data and the corresponding econometric technique, as opposed to a single period-average data cross-sectional model. We test the sensitivity of our results by estimating the same model with the three different definitions of resource intensity. Previous Sach's and Warner's findings still hold when using their measure of resource intensity in our different modeling framework, while those of Gylfason and Zoega do not. Using our per capita rents measure of resource-intensity we find evidence of a positive relationship between natural resource abundance and economic growth. We conclude that the results of the test for the RCH are dependent on both the definition of resource-intensity and whether the growth is modeled with cross-sectional or panel data.

Suggested Citation

  • Rambaldi, Alicia N. & Hall, Greg & Brown, Richard P.C., 2006. "Re-testing the Resource Curse Hypothesis Using Panel Data and an Improved Measure of Resource Intensity," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25289, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25289
    DOI: 10.22004/ag.econ.25289
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/25289/files/cp060275.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.25289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stijns, Jean-Philippe C., 2005. "Natural resource abundance and economic growth revisited," Resources Policy, Elsevier, vol. 30(2), pages 107-130, June.
    2. Venables, Anthony J. & Maloney, William & Kokko, Ari & Bravo Ortega, Claudio & Lederman, Daniel & Rigobón, Roberto & De Gregorio, José & Czelusta, Jesse & Jayasuriya, Shamila A. & Blomström, Magnus & , 2007. "Natural Resources: Neither Curse nor Destiny," IDB Publications (Books), Inter-American Development Bank, number 350.
    3. 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.
    4. 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.
    5. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    6. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    7. Atkinson, Giles & Hamilton, Kirk, 2003. "Savings, Growth and the Resource Curse Hypothesis," World Development, Elsevier, vol. 31(11), pages 1793-1807, November.
    8. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273, Elsevier.
    9. Syrquin, M. & Chenery, H.B., 1989. "Patterns Of Development, 1950 To 1983," World Bank - Discussion Papers 41, World Bank.
    10. Papyrakis, Elissaios & Gerlagh, Reyer, 2004. "The resource curse hypothesis and its transmission channels," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 181-193, March.
    11. Hollis Chenery† & T.N. Srinivasan (ed.), 1988. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 1, number 1.
    12. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jayakar, Krishna & Martin, Brandie, 2012. "Regulatory governance in African telecommunications: Testing the resource curse hypothesis," Telecommunications Policy, Elsevier, vol. 36(9), pages 691-703.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    2. Havranek, Tomas & Horvath, Roman & Zeynalov, Ayaz, 2016. "Natural Resources and Economic Growth: A Meta-Analysis," World Development, Elsevier, vol. 88(C), pages 134-151.
    3. Brunnschweiler, Christa N., 2008. "Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth," World Development, Elsevier, vol. 36(3), pages 399-419, March.
    4. Hailu, Degol & Kipgen, Chinpihoi, 2017. "The Extractives Dependence Index (EDI)," Resources Policy, Elsevier, vol. 51(C), pages 251-264.
    5. Boyce, John R. & Herbert Emery, J.C., 2011. "Is a negative correlation between resource abundance and growth sufficient evidence that there is a "resource curse"?," Resources Policy, Elsevier, vol. 36(1), pages 1-13, March.
    6. Lay, Jann & Omar Mahmoud, Toman, 2004. "Bananas, oil, and development: examining the resource curse and its transmission channels by resource type," Kiel Working Papers 1218, Kiel Institute for the World Economy (IfW Kiel).
    7. 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.
    8. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    9. Nuno Torres & Óscar Afonso & Isabel Soares, 2013. "A survey of literature on the resource curse: critical analysis of the main explanations, empirical tests and resource proxies," CEF.UP Working Papers 1302, Universidade do Porto, Faculdade de Economia do Porto.
    10. Adrian Boos & Karin Holm‐Müller, 2012. "A theoretical overview of the relationship between the resource curse and genuine savings as an indicator for “weak” sustainability," Natural Resources Forum, Blackwell Publishing, vol. 36(3), pages 145-159, August.
    11. Papyrakis, Elissaios & Gerlagh, Reyer, 2007. "Resource abundance and economic growth in the United States," European Economic Review, Elsevier, vol. 51(4), pages 1011-1039, May.
    12. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    13. Hartwell, Christopher A., 2016. "The institutional basis of efficiency in resource-rich countries," Economic Systems, Elsevier, vol. 40(4), pages 519-538.
    14. Abdul HANNAN* & Hasan M. MOHSIN**, 2015. "Regional Analysis of Resource Curse Hypothesis: Evidence from Panel Data," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(1), pages 45-66.
    15. Sofien Tiba & Mohamed Frikha, 2020. "Africa Is Rich, Africans Are Poor! A Blessing or Curse: An Application of Cointegration Techniques," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(1), pages 114-139, March.
    16. Sharma, Chandan & Paramati, Sudharshan Reddy, 2022. "Resource curse versus resource blessing: New evidence from resource capital data," Energy Economics, Elsevier, vol. 115(C).
    17. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    18. Elwasila Saeed Elamin Mohamed, 2020. "Resource Rents, Human Development and Economic Growth in Sudan," Economies, MDPI, vol. 8(4), pages 1-21, November.
    19. Hua Wang & Shi Wang & Cheng-Fu Yang & Sheng-Nan Jiang & Yun-Juan Li, 2019. "Resource Price Fluctuations, Resource Dependence and Sustainable Growth," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    20. Ali, Issa & Harvie, Charles, 2013. "Oil and economic development: Libya in the post-Gaddafi era," Economic Modelling, Elsevier, vol. 32(C), pages 273-285.

    More about this item

    Keywords

    Resource/Energy Economics and Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.