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The Resource Curse Exorcised: Evidence from a Panel of Countries

  • Brock Smith

    (Department of Economics, University of California Davis)

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    This paper evaluates the impact of major natural resource discoveries since 1950 on GDP per capita and other economic and social indicators. Using panel fixed-effects estimation ad resource discoveries in countries that were not previously resource-rich, I find a positive effect on GDP per capita following extraction that persists in the long term, in contrast with much of the resource curse literature that uses cross-sectional designs. I also find positive effects on education levels, reductions in infant mortality, and negative effects on democratic institutions. I further test these outcomes with synthetic control analysis, yielding results consistent the fixed-effects model.

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    File URL: http://wp.econ.ucdavis.edu/13-3.pdf
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    Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 133.

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    Length: 57
    Date of creation: 18 Mar 2013
    Date of revision:
    Handle: RePEc:cda:wpaper:13-3
    Contact details of provider: Postal: One Shields Ave., Davis, CA 95616-8578
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    Web page: http://www.econ.ucdavis.edu
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    1. Bravo-Ortega, Claudio & de Gregorio, Jose, 2005. "The relative richness of the poor? natural resources, human capital, and economic growth," Policy Research Working Paper Series 3484, The World Bank.
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