Natural-Resource Wealth: Elbow Grease or Fuel for Poverty?

Nisreen Salti

Journal of Institutional and Theoretical Economics (JITE), 2011, vol. 167, issue 3, 536-556

Abstract: We consider the effect of natural resources on growth using a two-sector model (resource and nonresource). Government taxes the nonresource sector and chooses institutional quality, which determines productivity in the nonresource sector and the government's ability to appropriate resource rents. We find that resource booms harm institutions. Their effect on growth depends on relative sector sizes: when rents are more substantial, governments are likelier to corrupt institutions to secure larger shares of rents. Cross-country panel data substantiate the results: countries in the bottom tercile of value added in manufacturing and services divided by GDP are cursed by resources; others are blessed.

JEL-codes: O4 P16 Q33 Q38 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/natural-res ... 28093245611797215477 (text/html)
Fulltext access is included for subscribers to the printed version.

Related works:
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:mhr:jinste:urn:sici:0932-4569(201109)167:3_536:nwegof_2.0.tx_2-p

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C

More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().