Cursed by resources or institutions?

Halvor Mehlum, Karl Ove Moene and Ragnar Torvik

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: Natural resource abundant countries constitute both growth losers and growth winners, and the main difference between the success cases and the cases of failure lays in the quality of institutions. With grabber friendly institutions more natural resources push aggregate income down, while with producer friendly institutions more natural resources increase income. Such a theory finds strong support in data. A key question we also discuss is if resources in addition alter the quality of institutions. When that is the case, countries with bad institutions suffer a double resource curse - as the deterioration of institutions strenghtens the negative effect of more natural resources.

Keywords: Natural resources; Institutional quality; Growth; Rent-seeking (search for similar items in EconPapers)
JEL-codes: F43 O4 Q0 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2005-05-25
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Journal Article: Cursed by Resources or Institutions? (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:5705

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