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Natural Resource Dependence and Economic Performance in the 1970-2000 Period

Author

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  • George Mavrotas
  • Syed Mansoob Murshed
  • Sebastian Torres

Abstract

We look at the type of natural resource dependence and growth in developing countries. Certain natural resources called point-source, such as oil and minerals, exhibit concentrated and capturable revenue patterns, while revenue flows from resources such as agriculture are more diffused. Developing countries that export the former type of products are regarded prone to growth failure due to institutional failure.We present an explicit model of growth collapse with micro-foundations in rent-seeking contests with increasing returns. Our econometric analysis is among the few in this literature with a panel data dimension. Point-source-type natural resource dependence does retard institutional development in both governance and democracy, which hampers growth. The resource curse, however, is more general and not simply confined to mineral exporters.

Suggested Citation

  • George Mavrotas & Syed Mansoob Murshed & Sebastian Torres, 2012. "Natural Resource Dependence and Economic Performance in the 1970-2000 Period," OxCarre Working Papers 081, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  • Handle: RePEc:oxf:oxcrwp:081
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    File URL: http://www.oxcarre.ox.ac.uk/files/OxCarre201281.pdf
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    References listed on IDEAS

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    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    2. Carlos Vargas-Silva, 2009. "The Tale of Three Amigos: Remittances, Exchange Rates, and Money Demand in Mexico," Review of Development Economics, Wiley Blackwell, vol. 13(1), pages 1-14, February.
    3. World Bank, 2002. "World Development Indicators 2002," World Bank Publications, The World Bank, number 13921, January.
    4. Lane, Philip R & Tornell, Aaron, 1996. "Power, Growth, and the Voracity Effect," Journal of Economic Growth, Springer, vol. 1(2), pages 213-241, June.
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    Citations

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    Cited by:

    1. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Smyth, Russell, 2016. "Oil curse and finance–growth nexus in Malaysia: The role of investment," Energy Economics, Elsevier, vol. 57(C), pages 154-165.
    2. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.
    3. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    4. Kinuthia, Bethuel Kinyanjui & Murshed, Syed Mansoob, 2015. "FDI determinants: Kenya and Malaysia compared," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 388-400.
    5. repec:eee:eneeco:v:70:y:2018:i:c:p:170-178 is not listed on IDEAS
    6. Nicolas Lemay-Hébert & Syed Mansoob Murshed, 2016. "Rentier Statebuilding in a Post-Conflict Economy: The Case of Kosovo," Development and Change, International Institute of Social Studies, vol. 47(3), pages 517-541, May.
    7. repec:eee:jjieco:v:47:y:2018:i:c:p:32-54 is not listed on IDEAS
    8. repec:pal:compes:v:59:y:2017:i:3:d:10.1057_s41294-017-0028-2 is not listed on IDEAS
    9. George Mavrotas, 2011. "Security and Development: Delving Deeper into the Nexus," Chapters,in: Security and Development, chapter 1 Edward Elgar Publishing.
    10. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    11. repec:spr:ieaple:v:17:y:2017:i:6:d:10.1007_s10784-017-9352-2 is not listed on IDEAS
    12. Ahmed, Khalid & Mahalik, Mantu Kumar & Shahbaz, Muhammad, 2016. "Dynamics between economic growth, labor, capital and natural resource abundance in Iran: An application of the combined cointegration approach," Resources Policy, Elsevier, vol. 49(C), pages 213-221.
    13. Hadili, Abduraawf & Raab, Roman & Wenzelburger, Jan, 2016. "Trade Liberalization in Arab Maghreb Union Countries," MPRA Paper 71123, University Library of Munich, Germany.
    14. Sahoo, Auro Kumar & Sahoo, Dukhabandhu & Sahu, Naresh Chandra, 2014. "Mining export, industrial production and economic growth: A cointegration and causality analysis for India," Resources Policy, Elsevier, vol. 42(C), pages 27-34.

    More about this item

    Keywords

    conflict; Natural resource dependence; economic performance; growth collapse; rent-seeking; resource curse;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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