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The Natural Resource Curse in Post-Soviet Countries : The Role of Institutions and Trade Policies

Author

Listed:
  • Roman Horváth

    (Institute of Economic Studies, Charles University)

  • Ayaz Zeynalov

Abstract

We examine the effect of natural resource abundance on economic performance during the 1996–2011 period in the 15 independent countries that formerly comprised the Soviet Union. These countries were a largely homogeneous group with respect to institutional development, liberalization and economic performance; however, these countries began to demonstrate marked differences from one another with respect to these factors during the transition, which has resulted in unique cross-section and time variation. Using several panel regression models that address the endogeneity issues, our results suggest that natural resources crowd out manufacturing sector unless the quality of domestic institutions is sufficiently high. Conversely, trade policies do not help convert the natural resource curse into a blessing.

Suggested Citation

  • Roman Horváth & Ayaz Zeynalov, 2014. "The Natural Resource Curse in Post-Soviet Countries : The Role of Institutions and Trade Policies," Working Papers 341, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    • Handle: RePEc:ost:wpaper:341
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    Cited by:

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    4. Asongu, Simplice A & Odhiambo, Nicholas M, 2023. "Governance quality and trade performance in Sub-Saharan Africa," Working Papers 29697, University of South Africa, Department of Economics.
    5. Muhammad Zeeshan & Jiabin Han & Alam Rehman & Hazrat Bilal & Naveed Farooq & Muhammad Waseem & Arif Hussain & Muhammad Khan & Ilyas Ahmad, 2021. "Nexus between Foreign Direct Investment, Energy Consumption, Natural Resource, and Economic Growth in Latin American Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 407-416.
    6. Fuinhas, José Alberto & Cardoso Marques, António & Da Silva Faria, Samuel, 2017. "Natural Resources, Globalization and Sustainable Economic Welfare: A Panel ARDL Approach /Recursos Naturales, Globalización y Bienestar Económico Sostenible: Un análisis ARDL en panel," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 653-672, Agosto.
    7. Byaro, Mwoyo & Kinyondo, Abel, 2020. "Institutional Quality Explains the Difference of Natural Gas Revenues to Contribute in the Economy: Empirical Evidence from Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 8(3), November.
    8. Ayaz Zeynalov, 2017. "The gravity of institutions in a resource-rich country: the case of Azerbaijan," International Economics and Economic Policy, Springer, vol. 14(2), pages 239-261, April.

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    More about this item

    Keywords

    natural resource curse; institutions; manufacturing; post-Soviet countries;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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