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Natural Resource Abundance and Economic Growth

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  • Jeffrey D. Sachs
  • Andrew M. Warner

Abstract

One of the surprising features of modern economic growth is that economies with abundant natural resources have tended to grow less rapidly than natural-resource-scarce economies. In this paper we show that economies with a high ratio of natural resource exports to GDP in 1971 (the base year) tended to have low growth rates during the subsequent period 1971-89. This negative relationship holds true even after controlling for variables found to be important for economic growth, such as initial per capita income, trade policy, government efficiency, investment rates, and other variables. We explore the possible pathways for this negative relationship by studying the cross-country effects of resource endowments on trade policy, bureaucratic efficiency, and other determinants of growth. We also provide a simple theoretical model of endogenous growth that might help to explain the observed negative relationship.

Suggested Citation

  • Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5398
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    References listed on IDEAS

    as
    1. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," NBER Working Papers 5039, National Bureau of Economic Research, Inc.
    2. Warner, Andrew M., 1994. "Mexico's investment collapse: debt or oil?," Journal of International Money and Finance, Elsevier, vol. 13(2), pages 239-256, April.
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    More about this item

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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    This item is featured on the following reading lists or Wikipedia pages:
    1. Maledizione delle risorse in Wikipedia Italian ne '')
    2. Ресурсное проклятие in Wikipedia Russian ne '')
    3. Kutukan sumber daya in Wikipedia Indonesian ne '')
    4. Ressourcenfluch in Wikipedia German ne '')
    5. Armut in Wikipedia German ne '')
    6. Прокляття ресурсів in Wikipedia Ukranian ne '')
    7. Resursförbannelsen in Wikipedia Swedish ne '')
    8. Ресурстар қарғысы in Wikipedia Kazakh ne '')
    9. 資源の呪い in Wikipedia Japanese ne '')
    10. Natural Resource Abundance and Economic Growth (NBER 1995) in ReplicationWiki

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