The Natural Resource Curse in Post-Soviet Countries: The Role of Institutions and Trade Policies

Roman Horvath and Ayaz Zeynalov

No 341, Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies)

Abstract: We examine the effect of natural resource abundance on economic performance during the 1996–2011 period in the 15 independent countries that formerly comprised the Soviet Union. These countries were a largely homogeneous group with respect to institutional development, liberalization and economic performance; however, these countries began to demonstrate marked differences from one another with respect to these factors during the transition, which has resulted in unique cross-section and time variation. Using several panel regression models that address the endogeneity issues, our results suggest that natural resources crowd out manufacturing sector unless the quality of domestic institutions is sufficiently high. Conversely, trade policies do not help convert the natural resource curse into a blessing.

Keywords: natural resource curse; institutions; manufacturing; post-Soviet countries (search for similar items in EconPapers)
JEL-codes: O11 O13 Q30 (search for similar items in EconPapers)
Pages: 18
Date: 2014-06
New Economics Papers: this item is included in nep-cis, nep-cwa, nep-ene, nep-gro, nep-int and nep-tra
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Citations: View citations in EconPapers (12)

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