Natural Resource Abundance and Economic Growth
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.
|Date of creation:||Dec 1995|
|Date of revision:|
|Publication status:||published as Sachs, Jeffrey D. and Andrew M. Warner. "The Big Rush, Natural Resource Booms And Growth," Journal of Development Economics, 1999, v59(1,Jun), 43-76.|
|Note:||EFG IFM EEE|
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- 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.
- Jeffrey D. Sachs & Andrew M. Warner, 1995.
"Economic Convergence and Economic Policies,"
Harvard Institute of Economic Research Working Papers
1715, Harvard - Institute of Economic Research.
- Jeffrey Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," CASE Network Studies and Analyses 0035, CASE-Center for Social and Economic Research.
- Jeffrey D. Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," NBER Working Papers 5039, National Bureau of Economic Research, Inc.
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