Leader behaviour and the natural resource curse
Francesco Caselli () and
Thomas Cunningham ()
Oxford Economic Papers, 2009, vol. 61, issue 4, 628-650
We discuss political economy mechanisms which can explain the resource curse, in which an increase in the size of resource rents causes a decrease in the economy's; total value added. We identify a number of channels through which resource rents will alter the incentives of a political leader. Some of these induce greater investment by the leader in assets that favour growth (infrastructure, rule of law, etc.), others lead to a potentially catastrophic drop in such activities. As a result, the effect of resource abundance can be highly non-monotonic. We argue that it is critical to understand how resources affect the leader's 'survival function', i.e. the reduced-form probability of retaining power. We also briefly survey decentralized mechanisms, in which rents induce a reallocation of labour by private agents, crowding out productive activity more than proportionately. We argue that these mechanisms cannot be fully understood without simultaneously studying leader behaviour. Copyright 2009 Oxford University Press 2009 All rights reserved, Oxford University Press.
References: Add references at CitEc
Citations: View citations in EconPapers (64) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Leader Behavior and the Natural Resource Curse (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:61:y:2009:i:4:p:628-650
Ordering information: This journal article can be ordered from
Access Statistics for this article
Oxford Economic Papers is currently edited by A. Banerjee and James Forder
More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().