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The Resource Curse and Fiscal Policy Volatility

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  • Michael Bleaney
  • Håvard Halland

Abstract

Using data from 1980 to 2004, we show that greater fiscal policy volatility acts as a transmission mechanism for the ‘resource curse’. Resource exports dominate political and institutional variables as determinants of fiscal policy volatility, with fiscal policy volatility being a significant determinant of growth. The existence of a resource curse is confirmed, in the sense that a higher ratio of natural resource exports to total merchandise exports is associated with significantly slower per capita GDP growth. There are no statistically significant differences between the effects of point-source and diffuse resource exports.

Suggested Citation

  • Michael Bleaney & Håvard Halland, "undated". "The Resource Curse and Fiscal Policy Volatility," Discussion Papers 09/09, University of Nottingham, CREDIT.
  • Handle: RePEc:not:notcre:09/09
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    File URL: http://www.nottingham.ac.uk/credit/documents/papers/09-09.pdf
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    References listed on IDEAS

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    8. Poelhekke, Steven & van der Ploeg, Frederick, 2007. "Volatility, Financial Development and the Natural Resource Curse," CEPR Discussion Papers 6513, C.E.P.R. Discussion Papers.
    9. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
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    Keywords

    Fiscal policy; growth; resource curse.;

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