The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions

Jeffrey Frankel

No 233, CID Working Papers from Center for International Development at Harvard University

Abstract: Countries with oil, mineral or other natural resource wealth, on average, have failed to show better economic performance than those without, often because of undesirable side effects. This is the phenomenon known as the Natural Resource Curse. This paper reviews the literature, classified according to six channels of causation that have been proposed. The possible channels are: (i) long-term trends in world prices, (ii) price volatility, (iii) permanent crowding out of manufacturing, (iv) autocratic/oligarchic institutions, (v) anarchic institutions, and (vi) cyclical Dutch Disease. With the exception of the first channel – the long-term trend in commodity prices does not appear to be downward – each of the other channels is an important part of the phenomenon. Skeptics have questioned the Natural Resource Curse, pointing to examples of commodity-exporting countries that have done well and arguing that resource exports and booms are not exogenous. The relevant policy question for a country with natural resources is how to make the best of them.

Keywords: Natural Resource; Diagnoses and Prescriptions (search for similar items in EconPapers)
Date: 2012-04
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Citations: View citations in EconPapers (169)

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Related works:
Working Paper: The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions (2012)
Working Paper: The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions (2012)
Working Paper: The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cid:wpfacu:233

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