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Corruption, development and the Curse of Natural Resources forthcoming Canadian Journal of Political Science

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Sachs and Warner (1995) found a negative relationship between natural resources and economic growth, concluding that natural resources are a curse. This explanation for poor economic growth is now widely accepted. We provide an alternative econometric framework for evaluating the resource curse. We focus on resource rents and rent-seeking behaviour, arguing that rent seeking affects corruption and that, in turn, impacts wellbeing. Our measure of wellbeing is the Human Development Index, although we find similar results for per capita GDP. While resource abundance does not directly impact economic development, we find that natural resources are associated with rent seeking that negatively affects wellbeing, with results robust to various model specifications and sensitivity analyses.

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  • Shannon M. Pendergast & Judith A. Clarke & G. Cornelis van Kooten, 2010. "Corruption, development and the Curse of Natural Resources forthcoming Canadian Journal of Political Science," Department Discussion Papers 1002, Department of Economics, University of Victoria.
    • Handle: RePEc:vic:vicddp:1002
    Note: ISSN 1914-2838
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