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Minerals, Openness, Institutions and Growth: An Empirical Analysis

  • James L. Butkiewicz

    ()

    (Department of Economics,University of Delaware)

  • Halit Yanikkaya

    ()

Empirical evidence from a panel-data analysis indicates that a mineral resource curse exists for certain developing countries, but not for developed countries. Countries with weak institutions are cursed, while developing countries with strong institution are able to avoid the curse. These results are consistent the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital, to the detriment of growth of other sectors of the economy. Imports of manufactured goods substitute for the development of domestic manufacturing, so openness to trade correlates with lower growth in mineral dependent countries.

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File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2007/UDWP2007-04.pdf
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Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 07-04.

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Length: 26 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:dlw:wpaper:07-04.
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Web page: http://www.lerner.udel.edu/departments/economics/department-economics/

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  2. Osmel Manzano & Roberto Rigobon, 2001. "Resource Curse or Debt Overhang?," NBER Working Papers 8390, National Bureau of Economic Research, Inc.
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  4. Stijns, Jean-Philippe C., 2001. "Natural Resource Abundance and Human Capital Accumulation," Conference Papers 25128, University of California, Berkeley, Department of Agricultural and Resource Economics.
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  19. Halvor Mehlum & Karl Ove Moene & Ragnar Torvik, 2005. "Cursed by resources or institutions?," Working Paper Series 5705, Department of Economics, Norwegian University of Science and Technology.
  20. Auty, Richard M., 1994. "Industrial policy reform in six large newly industrializing countries: The resource curse thesis," World Development, Elsevier, vol. 22(1), pages 11-26, January.
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