Topic
Resource curse
About: Resource curse is a research topic. Over the lifetime, 2593 publications have been published within this topic receiving 85389 citations. The topic is also known as: paradox of plenty.
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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.
3,309 citations
TL;DR: The authors examined three aspects of this "oil impedes democracy" claim and found that oil exports are strongly associated with authoritarian rule, and that other types of mineral exports have a similar antidemocratic effect, while other commodity exports do not.
Abstract: Some scholars suggest that the Middle East's oil wealth helps explain its failure to democratize. This article examines three aspects of this “oil impedes democracy” claim. First, is it true? Does oil have a consistendy antidemocratic effect on states, once other factors are accounted for? Second, can this claim be generalized? Is it true only in the Middle East or elsewhere as well? Is it true for other types of mineral wealth and other types of commodity wealth or only for oil? Finally, if oil does have antidemocratic properties, what is the causal mechanism?The author uses pooled time-series cross-national data from 113 states between 1971 and 1997 to show that oil exports are strongly associated with authoritarian rule; that this effect is not limited to the Middle East; and that other types of mineral exports have a similar antidemocratic effect, while other types of commodity exports do not.The author also tests three explanations for this pattern: a “rentier effect,” which suggests that resource-rich governments use low tax rates and patronage to dampen democratic pressures; a “repression effect,” which holds that resource wealth enables governments to strengthen their internal security forces and hence repress popular movements; and a “modernization effect,” which implies that growth that is based on the export of oil and minerals will fail to bring about die social and cultural changes that tend to produce democratic government. He finds at least limited support for all three effects.
2,795 citations
TL;DR: This article 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.
Abstract: One of the surprising features of modern economic growth is that economies with abundant natural resources have tended to grow less rapidly than natural-resource-scarce economies. In this paper we show that economies with a high ratio of natural resource exports to GDP in 1971 (the base year) tended to have low growth rates during the subsequent period 1971-89. This negative relationship holds true 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. We explore the possible pathways for this negative relationship by studying the cross-country effects of resource endowments on trade policy, bureaucratic efficiency, and other determinants of growth. We also provide a simple theoretical model of endogenous growth that might help to explain the observed negative relationship.
2,317 citations
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TL;DR: 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.
2,148 citations
TL;DR: In this paper, 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 contrast the claims of Sachs and Warner that institutions do not play a role.
1,917 citations