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Subnational resource curse: do economic or political institutions matter?

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  • Libman, Alexander

Abstract

The absence or the presence of the resource curse is often explained by the specifics of political and institutional factors. The aim of this paper is to study this effect looking separately at economic and political institutions and at their interaction. Unlike most empirical papers in the literature, this paper considers the intra-national variation of institutional environment and access to political decision-making, using a dataset of the Russian regions. It shows that subnational variation of the quality of institutions indeed matters for the effects of resources. Economic institutions follow the traditional 'resource curse' results: resources have a negative impact on growth if the quality of institutions is low. On the other hand, increasing level of democracy has negative consequences for regions with substantial resources. Finally, this paper studies the differentiation between the resource-extracting regions and regions, exporting, but not extracting resources, in terms of the conditional resource curse.

Suggested Citation

  • Libman, Alexander, 2010. "Subnational resource curse: do economic or political institutions matter?," Frankfurt School - Working Paper Series 154, Frankfurt School of Finance and Management.
    • Handle: RePEc:zbw:fsfmwp:154
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    Cited by:

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    4. Kostka, Genia & Moslener, Ulf & Andreas, Jan G., 2011. "Barriers to energy efficiency improvement: Empirical evidence from small-and-medium sized enterprises in China," Frankfurt School - Working Paper Series 178, Frankfurt School of Finance and Management.
    5. Alexander Libman & Vladimir Kozlov & André Schultz, 2012. "Roving Bandits in Action: Outside Option and Governmental Predation in Autocracies," Kyklos, Wiley Blackwell, vol. 65(4), pages 526-562, November.
    6. Yu, Xiaofan, 2011. "A spatial interpretation of the persistency of China's provincial inequality," Frankfurt School - Working Paper Series 171, Frankfurt School of Finance and Management.
    7. Böing, Philipp & Müller, Elisabeth, 2012. "Technological Capabilities of Chinese Enterprises: Who is Going to Compete Abroad?," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62081, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    subnational variation; conditional resource curse; democracy; economic institutions; transition economies;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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