Relationship between natural resources and institutions

Mathieu Couttenier

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This article analyses through a rent seeking model, the relationship between institutions' quality and natural resources. Depending on the institutions quality, each country has a specific structural capacity to stand natural resources dependency. It is shown that for each country, a threshold exists, such that beyond this point, any additional amounts of natural resources begin to have a negative impact on institutions. As the stock of natural resources increases, this improves the expected profitability of rent seeking, which in turn lowers the quality of institutions. The mechanism comes from a new balance of power within the country. However, the institutional degradation's intensity is determined by social interactions and depends on both the resources nature and their appropriability level. The inverse U-shaped curve obtained from empirical studies presented in this article supports the natural resources non-monotonic effect on institutions found in the model

Keywords: Natural resources; institutions; rent seeking (search for similar items in EconPapers)
JEL-codes: F10 O10 O43 Q32 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2008-10
New Economics Papers: this item is included in nep-env
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
ftp://mse.univ-paris1.fr/pub/mse/CES2008/Bla08060.pdf (application/pdf)

Related works:
Working Paper: Relationship Between Natural Resources and Institutions (2008)
Working Paper: Relationship Between Natural Resources and Institutions (2008)
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:mse:cesdoc:bla08060

Access Statistics for this paper

More papers in Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().