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Shifting Frontiers in Global Resource Wealth: The Role of Policies and Institutions


  • Arezki, Rabah
  • Toscani, Frederik
  • van der Ploeg, Frederick


This paper explores the impact of increased market orientation and improved institutions on global resource wealth using a novel dataset of major hydrocarbon and mineral discoveries. Guided by the predictions of a two-region model, we employ an instrumental variable strategy to test whether increased market orientation boosts discoveries. Our results indicate that if Latin America and sub-Saharan Africa were to adopt the same quality of institutions as the United States, discoveries worldwide would increase by 25 percent. Our results support the primacy of institutions by calling into question the commonly held view that resource endowments are exogenous.

Suggested Citation

  • Arezki, Rabah & Toscani, Frederik & van der Ploeg, Frederick, 2016. "Shifting Frontiers in Global Resource Wealth: The Role of Policies and Institutions," CEPR Discussion Papers 11553, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11553

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    References listed on IDEAS

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    Cited by:

    1. Thorsten Beck & Steven Poelhekke, 2017. "Follow the money: Does the Financial Sector Intermediate Natural Resource Windfalls?," Tinbergen Institute Discussion Papers 17-027/VIII, Tinbergen Institute.

    More about this item


    discoveries; endogenous reserves; institutions; liberalization; market orientation; Natural resources;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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