Education, Rent-seeking and the Curse of Natural Resources

Waqar Wadho

MPRA Paper from University Library of Munich, Germany

Abstract: Empirical evidence suggests that natural resources breed corruption and reduce educational attainments, dampening economic growth. The theoretical literature has treated these two channels separately, with natural resources affecting growth either through human capital or corruption. In this paper, we argue that education and corruption are jointly determined and depend on the endowment of natural resources. Natural resources affect the incentives to invest in education and rent seeking that in turn affect growth. Whether natural resources stimulate growth or induce a poverty-trap crucially depends on inequality in access to education and political participation, as well as on the cost of political participation. For lower inequality and higher cost of political participation, a high-growth and a poverty-trap equilibrium co-exist even with abundant natural resources.

Keywords: Natural resources; Resource curse; Growth; Human capital; Rent-seeking; Corruption (search for similar items in EconPapers)
JEL-codes: D72 J24 O11 O13 O41 (search for similar items in EconPapers)
Date: 2011-06-01
New Economics Papers: this item is included in nep-cwa, nep-edu, nep-env, nep-lab, nep-pol and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/37831/1/MPRA_paper_37831.pdf original version (application/pdf)

Related works:
Journal Article: Education, Rent seeking and the Curse of Natural Resources (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37831

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().