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The Resource Curse Exorcised: Evidence from a Panel of Countries

Brock Smith ()

No 165, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: This paper evaluates the impact of major natural resource discoveries since 1950 on GDP per capita and its proximate causes. Using panel fixed-effects estimation and resource discoveries in countries that were not previously resource-rich as a plausibly exogenous source of variation, I find a positive effect on GDP per capita levels following resource exploitation that persists in the long term. Results vary significantly between OECD and non-OECD treatment countries, with effects concentrated within the non-OECD group. I further test GDP effects with synthetic control analysis on each individual treated country, yielding results consistent with the average effects found with the fixed-effects model. Productivity, capital formation and education were also positively affected by resource discovery, while growth accounting analysis suggests productivity gains were a major distinguishing factor in GDP effects.

Keywords: natural resource curse; economic growth; growth regressions; growth accounting; oil (search for similar items in EconPapers)
JEL-codes: F12 Q37 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-gro
Date: 2016
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Related works:
Journal Article: The resource curse exorcised: Evidence from a panel of countries (2015) Downloads
Working Paper: The Resource Curse Exorcised: Evidence from a Panel of Countries (2013) Downloads
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