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Institutions and the resource curse
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In this article, the authors claim that the main reason for diverging experiences is differences in the quality of institutions, and they test this theory building on Sachs and Warner's influential works on the resource curse.Abstract:
Countries rich in natural resources constitute both growth losers and growth winners. We claim that the main reason for these diverging experiences is differences in the quality of institutions. More natural resources push aggregate income down, when institutions are grabber friendly, while more resources raise income, when institutions are producer friendly. We test this theory building on Sachs and Warner's influential works on the resource curse. Our main hypothesis: that institutions are decisive for the resource curse, is confirmed. Our results are in sharp contrast to the claim by Sachs and Warner that institutions do not play a role.read more
Citations
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Economic Freedom and Productivity Growth in Resource-rich Economies
TL;DR: This paper used the Fraser Institute's economic freedom index and its five sub-indices, namely government size, property rights, access to sound money, freedom to trade, and setting proper regulations, to test whether free market institutions that protect property rights and support freedom of choice and voluntary exchange can change the curse of natural resources into a blessing.
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Do natural resources depress income per capita
TL;DR: In this article, the authors provide new cross-country empirical evidence for the effect of resources in income per capita, showing that natural resource dependence (resource exports) has a significant negative effect on income, especially in countries with bad rule of law or bad policies.
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Breaking the resource curse: Transparency in the natural resource sector and the extractive industries transparency initiative
TL;DR: In this article, the authors examined the impact of the EITI on economic development and quality of governance in approximately 200 countries and found that the negative effect of resource abundance on GDP per capita, the capacity of the government to formulate and implement sound policies and the level of rule of law is mitigated.
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Natural resources: A curse on education spending?
Lara Cockx,Nathalie Francken +1 more
TL;DR: In this article, a large panel dataset of 140 countries covering the period from 1995 to 2009 was used to investigate the effect of resource dependence on public education expenditures relative to GDP and found that this resource curse effect on government prioritization of education mainly stems from point-source natural resources.
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Resource Curse and Power Balance: Evidence from Oil-Rich Countries
TL;DR: This paper examined the role of political fractionalization in understanding the resource curse in 30 oil-rich countries and found that the income effect of resource rents is moderated by the political power balance.
References
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Journal ArticleDOI
Why Do Some Countries Produce so Much More Output Per Worker than Others
TL;DR: This paper showed that differences in physical capital and educational attainment can only partially explain the variation in output per worker, and that a large amount of variation in the level of the Solow residual across countries is driven by differences in institutions and government policies.
Posted Content
Greed and Grievance in Civil War
Paul Collier,Anke Hoeffler +1 more
TL;DR: Collier and Hoeffler as discussed by the authors compare two contrasting motivations for rebellion: greed and grievance, and show that many rebellions are linked to the capture of resources (such as diamonds in Angola and Sierra Leone, drugs in Colombia, and timber in Cambodia).
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Institutions and economic performance: cross‐country tests using alternative institutional measures
Stephen Knack,Philip Keefer +1 more
TL;DR: The authors compared more direct measures of the institutional environment with both the instability proxies used by Barro (1991) and the Gastil indices, by comparing their effects both on growth and private investment.
Posted Content
Natural Resource Abundance and Economic Growth
TL;DR: The authors showed that countries with a high ratio of natural resource exports to GDP tended to have low growth rates during the subsequent period 1971-89, even after controlling for variables found to be important for economic growth, such as initial per capita income, trade policy, government efficiency, investment rates, and other variables.
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The curse of natural resources
TL;DR: The authors showed that there is little direct evidence that omitted geographical or climate variables explain the curse of natural resources, or that there was a bias resulting from some other unobserved growth deterrent.