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The Resource Curse Exorcised: Evidence from a Panel of Countries

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  • Brock Smith

    (Department of Economics, University of California Davis)

Abstract

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.

Suggested Citation

  • Brock Smith, 2013. "The Resource Curse Exorcised: Evidence from a Panel of Countries," Working Papers 63, University of California, Davis, Department of Economics.
    • Handle: RePEc:cda:wpaper:63
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    More about this item

    Keywords

    Resource Curse; Oil; Economic Growth;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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