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Resource curse or not: A question of appropriability

  • Anne D. Boschini
  • Jan Pettersson
  • Jesper Roine

This paper shows that whether natural resources are good or bad for a country’s development crucially depends on the interaction between institutional setting and the type of resources possessed by the country. Some natural resources are, for economical and technical reasons, more likely to cause problems such as rent-seeking and conflicts than others. This potential problem can, however, be countered by good institutional quality. In contrast to the traditional resource curse hypothesis, we show the impact of natural resources on economic growth to be non-monotonic in institutional quality. Countries rich in minerals are cursed only if they have low quality institutions, while the curse is reversed if institutions are sufficiently good.

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File URL: http://degit.sam.sdu.dk/papers/degit_11/C011_050.pdf
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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c011_050.

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Length: 44 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:deg:conpap:c011_050
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