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The resource curse hype : paradox or red herring?

Document type: article
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Abstract: The empirical basis for the so-called resource curse was evaluated and it was shown that, despite the topic’s popularity in economics and political science research, this apparent paradox is a red herring. The most commonly used measure of ‘resource abundance’ can be more usefully interpreted as a proxy for ‘resource dependence’. In multiple estimations that combine resource abundance and dependence, institutional and constitutional variables, it was found that (i) resource abundance, constitutions and institutions determine resource dependence, (ii) resource dependence does not affect growth, and (iii) there is no evidence that resource-dependent countries end up with slow growth and bad institutions. Rather, countries with bad institutions attract little investment, and as a result they grow more slowly and remain dependent on exports of commodities. But this is not a paradox at all.
Authors: Bulte, E.
Category: Research
Serial number: 4
ISSN: 1874-2033
Journal: The Broker
Keywords: economic development , natural resources
Language: eng
Organization: The Broker
Year: 2007
Right: © 2007 IDP. This article has been licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported license.
Subject: Economic Development and Trade
Start Page: 19
Title: The resource curse hype : paradox or red herring?