Are natural resources a “curse” or a “blessing”? The empirical evidence suggests either outcome is possible. The paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in non-democratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies.

Natural Resources: Curse or Blessing?

Are natural resources a "curse" or a "blessing" The empirical evidence suggests that either outcome is possible. This paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization, and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in nondemocratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies.

/pdf/natural-resources-curse-or-blessing-43sxsn9q20.pdf

https://www.econstor.eu/bitstream/10419/171504/1/wp-06-061.pdf

The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings

The Global Energy Assessment (GEA) brings together over 300 international researchers to provide an independent, scientifically based, integrated and policy-relevant analysis of current and emerging energy issues and options. It has been peer-reviewed anonymously by an additional 200 international experts. The GEA assesses the major global challenges for sustainable development and their linkages to energy; the technologies and resources available for providing energy services; future energy systems that address the major challenges; and the policies and other measures that are needed to realize transformational change toward sustainable energy futures. The GEA goes beyond existing studies on energy issues by presenting a comprehensive and integrated analysis of energy chalenges, opportunities and strategies, for developing, industrialized and emerging economies. This volume is a invaluable resource for energy specialists and technologists in all sectors (academia, industry and government) as well as policymakers, development economists and practitioners in international organizations and national governments.

Global Energy Assessment: Toward a Sustainable Future

https://www.cmi.no/publications/file/3332-what-determines-chinese-outward-fdi.pdf

What determines Chinese outward FDI

https://www.econstor.eu/bitstream/10419/171495/1/wp-06-051.pdf

Cursing the blessings? Natural resource abundance, institutions, and economic growth

In this paper we examine the claim that natural resources invite civil conflict, and challenge the main stylized facts in this literature. We find that the conventional measure of resource dependence is endogenous with respect to conflict, and that instrumenting for dependence implies that it is no longer significant in conflict regressions. Instead, it appears that conflict increases dependence on resource extraction (as a default sector). Moreover, resource abundance is associated with a reduced probability of the onset of war. These results are robust to a range of specifications and, considering the conflict channel, we conclude there is no reason to regard resources as a general curse to peace and development

/pdf/natural-resources-and-violent-conflict-resource-abundance-3ibr5hhcai.pdf

Natural resources and violent conflict: resource abundance, dependence, and the onset of civil wars

This paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environmental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdeveloped financial sectors are unable to efficiently channel loans to RE producers. The influence of financial sector development on the use of renewable energy resources is confirmed in panel data estimations on up to 119 non-OECD countries for 1980–2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non-hydropower RE such as wind, solar, geothermal and biomass. There is also evidence that the development of the RE sector has picked up significantly in the period since the adoption of the Kyoto Protocol.

/pdf/finance-for-renewable-energy-an-empirical-analysis-of-370pi1ufmq.pdf

Finance for renewable energy: an empirical analysis of developing and transition economies

This paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environmental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdeveloped financial sectors are unable to efficiently channel loans to RE producers. The influence of financial sector development on the use of renewable energy resources is conformed in panel data estimations on up to 119 non-OECD countries for 1980-2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non-hydropower RE such as wind, solar, geothermal, and biomass. There is also evidence that the adoption of the Kyoto Protocol has had a significant positive impact on the development of the RE sector.

/pdf/finance-for-renewable-energy-an-empirical-analysis-of-e5iua30cdt.pdf

Christa N. Brunnschweiler

Papers

The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings

Cursing the blessings? Natural resource abundance, institutions, and economic growth

Natural resources and violent conflict: resource abundance, dependence, and the onset of civil wars

Finance for renewable energy: an empirical analysis of developing and transition economies

Finance for Renewable Energy: An Empirical Analysis of Developing and Transition Economies