The Evolution of the Natural Resource Curse Thesis: A Critical Literature Survey

Ramez Badeed, Hooi Hooi Lean () and Jeremy Clark

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper surveys the literature of the natural resource curse hypothesis. We review the theoretical mechanisms through which natural resource wealth might slow economic growth, and then the empirical studies that test for an effect overall, or an effect on factors typically associated with economic growth. We also review more recent studies suggesting that the findings supporting the resource curse may reflect only empirical mis-specification. The literature has produced conflicting evidence, with no consensus on the net effect of natural resources in an economy. Overall we argue that evidence for a negative effect of natural resource dependence on economic growth remains convincing, particularly for developing economies and particularly working through factors closely associated with growth. We take recent contrarian studies to demonstrate, however, both that a resource curse is not inevitable, and that future studies should better address issues of endogeneity of dependence measures, years of study, and potential non-monotonic relationships.

Keywords: natural resource curse; natural resource dependence; natural resource abundance; economic growth; literature survey (search for similar items in EconPapers)
JEL-codes: O13 O47 Q32 Q33 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-04-07
New Economics Papers: this item is included in nep-ene, nep-gro and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The evolution of the natural resource curse thesis: A critical literature survey (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:16/05

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