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Institutions and the resource curse
TLDR
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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The costs of organized violence: a review of the evidence
TL;DR: The authors reviewed recent studies that estimate the costs of violence and conflict that can emerge among organized political groupings, such as states, religious and ethnic organizations, guerillas and paramilitaries.
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Natural wealth accounts: A proposal for alleviating the natural resource curse
TL;DR: In this paper, the authors propose a system of Natural Wealth Accounts that converts commodity rents into tax revenues, mimicking the discipline that tax revenues impose in resource-poor countries, creating an endowment effect (citizens will require the government to justify why it is taxing their rents); an information effect (curious citizens will understand the problem better); and an income effect (the population will retain some of the rents).
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Natural Resource Wealth: The Challenge of Managing a Windfall
TL;DR: In this article, a review explores the reasons for these failures and discusses policies to improve performance. But the authors do not consider the impact of the volatility of revenues on the performance of countries.
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Institutional quality and financial development: The United States perspective
Muhammad Asif Khan,Muhammad Atif Khan,Mohamued Elyas Abdulahi,Idrees Liaqat,Sayyed Sadaqat Hussain Shah +4 more
TL;DR: This article revisited the ambiguous natural resource rent and finance nexus in the context of the United States, incorporating the vital role of institutional quality in this paradigm, and found that institutional quality is a significant prerequisite to financial development.
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Can the Natural Resource Curse Be Turned Into a Blessing? The Role of Trade Policies and Institutions
TL;DR: In this paper, the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness, and initial income were analyzed. But these results do not survive once they use instrumental variables techniques to correct for the endogenous nature of the explanatory variables.
References
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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.