IDEAS home Printed from https://ideas.repec.org/p/zbw/hwwirp/106.html
   My bibliography  Save this paper

The resource curse revisited: Governance and natural resources

Author

Listed:
  • Busse, Matthias
  • Gröning, Steffen

Abstract

The paper analyses the impact of natural resource abundance on selected governance indicators. In contrast to earlier studies that are mainly confined to cross-sectional analysis, we use a panel data set with a large number of countries and an extended period of time. Moreover, we employ an instrumental variable technique to account for endogeneity. The results show that exports of natural resources have, above all, led to an increase in corruption. This result is robust to both different model specifications and an alternative indicator for natural resource abundance. For other governance indicators, such as law and order and bureaucratic quality, we either find no results or results that lack robustness.

Suggested Citation

  • Busse, Matthias & Gröning, Steffen, 2011. "The resource curse revisited: Governance and natural resources," HWWI Research Papers 106, Hamburg Institute of International Economics (HWWI).
  • Handle: RePEc:zbw:hwwirp:106
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/48184/1/663755492.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
    2. 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.
    3. Freille, Sebastian & Haque, M. Emranul & Kneller, Richard, 2007. "A contribution to the empirics of press freedom and corruption," European Journal of Political Economy, Elsevier, vol. 23(4), pages 838-862, December.
    4. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.
    5. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    6. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2013. "The Political Resource Curse," American Economic Review, American Economic Association, vol. 103(5), pages 1759-1796, August.
    7. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    8. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," World Bank Economic Review, World Bank Group, vol. 19(2), pages 141-174.
    9. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May.
    10. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    11. Brunnschweiler, Christa N., 2008. "Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth," World Development, Elsevier, vol. 36(3), pages 399-419, March.
    12. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    13. Silje Aslaksen, 2010. "Oil and democracy: More than a cross-country correlation?," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 421-431, July.
    14. Thomas A. Garrett & Russell S. Sobel, 2003. "The Political Economy of FEMA Disaster Payments," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 496-509, July.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Vicente, Pedro C., 2010. "Does oil corrupt? Evidence from a natural experiment in West Africa," Journal of Development Economics, Elsevier, vol. 92(1), pages 28-38, May.
    17. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
    18. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    19. Peter T. Leeson & Russell S. Sobel, 2008. "Weathering Corruption," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 667-681, November.
    20. Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
    21. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 158-183, December.
    22. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
    23. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
    24. Monica Escaleras & Nejat Anbarci & Charles Register, 2007. "Public sector corruption and major earthquakes: A potentially deadly interaction," Public Choice, Springer, vol. 132(1), pages 209-230, July.
    25. Danila Serra, 2006. "Empirical determinants of corruption: A sensitivity analysis," Public Choice, Springer, vol. 126(1), pages 225-256, January.
    26. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, vol. 33(7), pages 1029-1044, July.
    27. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matthias Busse & Ceren Erdogan & Henning Mühlen, 2016. "China's Impact on Africa – The Role of Trade, FDI and Aid," Kyklos, Wiley Blackwell, vol. 69(2), pages 228-262, May.
    2. Mehrdad Vahabi, 2017. "A critical survey of the resource curse literature through the appropriability lens," CEPN Working Papers 2017-14, Centre d'Economie de l'Université de Paris Nord.
    3. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2018. "Decentralization and Governance in Europe: Evidence from Different Expenditure Components," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1808, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. James A. Piazza, 2016. "Oil and terrorism: an investigation of mediators," Public Choice, Springer, vol. 169(3), pages 251-268, December.
    5. Andreas P. Kyriacou & Oriol Roca Sagalés, 2018. "Decentralization and governance in Europe: Evidence from different expenditure components," Working Papers. Collection A: Public economics, governance and decentralization 1802, Universidade de Vigo, GEN - Governance and Economics research Network.
    6. Hohenleitner, Ingrid & Hillmann, Katja, 2012. "Impact of Benefit Sanctions on Unemployment Outflow - Evidence from German Survey Data," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66055, Verein für Socialpolitik / German Economic Association.
    7. repec:eee:jjieco:v:47:y:2018:i:c:p:32-54 is not listed on IDEAS
    8. Murshed, S.M. & Badiuzzaman, M. & Pulok, M.H., 2015. "Revisiting the role of the resource curse in shaping institutions and growth," ISS Working Papers - General Series 605, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    9. repec:pal:compes:v:59:y:2017:i:3:d:10.1057_s41294-017-0028-2 is not listed on IDEAS
    10. Antonakakis, Nikolaos & Cunado, Juncal & Filis, George & Perez de Gracia, Fernando, 2015. "The Resource Curse Hypothesis Revisited: Evidence from a Panel VAR," MPRA Paper 72085, University Library of Munich, Germany.
    11. Andreas Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Construction corrupts: empirical evidence from a panel of 42 countries," Public Choice, Springer, vol. 165(1), pages 123-145, October.
    12. Kjetil Bjorvatn & Tina Søreide, 2014. "Corruption and competition for resources," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(6), pages 997-1011, December.
    13. repec:eee:jrpoli:v:53:y:2017:i:c:p:147-163 is not listed on IDEAS
    14. Raymond J. March & Conrad Lyford & Benjamin Powell, 2017. "Causes and barriers to increases in economic freedom," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(1), pages 87-103, March.
    15. Nadezhda V. Baryshnikova & Ngoc T.A. Pham & Maria M. Wihardja, 2016. "Does Political and Economic Inequality Affect Institutional Quality?," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 190-208, June.
    16. Corrigan, Caitlin C., 2014. "Breaking the resource curse: Transparency in the natural resource sector and the extractive industries transparency initiative," Resources Policy, Elsevier, vol. 40(C), pages 17-30.
    17. Albassam, Bassam A., 2015. "Economic diversification in Saudi Arabia: Myth or reality?," Resources Policy, Elsevier, vol. 44(C), pages 112-117.
    18. Xu, Xiaoliang & Xu, Xuefen & Chen, Qian & Che, Ying, 2016. "The research on generalized regional “resource curse” in China's new normal stage," Resources Policy, Elsevier, vol. 49(C), pages 12-19.
    19. repec:eee:wdevel:v:99:y:2017:i:c:p:214-229 is not listed on IDEAS
    20. Issaka Dialga, 2017. "A Sustainability Index of Mining Countries," Working Papers halshs-01500643, HAL.
    21. Horatiu Rus, 2014. "Corruption, conflict and the management of natural resources," Economics of Governance, Springer, vol. 15(4), pages 355-386, November.
    22. Bürgi Bonanomi, Elisabeth & Elsig, Manfred & Espa, Ilaria, 2015. "The Commodity Sector and Related Governance Challenges from a Sustainable Development Perspective: The Example of Switzerland Current Research Gaps," Papers 865, World Trade Institute.
    23. repec:kap:pubcho:v:175:y:2018:i:3:d:10.1007_s11127-018-0533-5 is not listed on IDEAS

    More about this item

    Keywords

    Natural Resources; Resource Curse; Corruption; Governance;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:hwwirp:106. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics). General contact details of provider: http://edirc.repec.org/data/hwwiide.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.