Corruption, development and the Curse of Natural Resources forthcoming Canadian Journal of Political Science

Shannon M. Pendergast, Judith A. Clarke and Gerrit van Kooten

No 1002, Department Discussion Papers from Department of Economics, University of Victoria

Abstract: Sachs and Warner (1995) found a negative relationship between natural resources and economic growth, concluding that natural resources are a curse. This explanation for poor economic growth is now widely accepted. We provide an alternative econometric framework for evaluating the resource curse. We focus on resource rents and rent-seeking behaviour, arguing that rent seeking affects corruption and that, in turn, impacts wellbeing. Our measure of wellbeing is the Human Development Index, although we find similar results for per capita GDP. While resource abundance does not directly impact economic development, we find that natural resources are associated with rent seeking that negatively affects wellbeing, with results robust to various model specifications and sensitivity analyses.

Pages: 31 pages
Date: 2010-06
New Economics Papers: this item is included in nep-dev, nep-env, nep-gro and nep-hap
Note: ISSN 1914-2838
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