Natural resources and institutions: the “natural resources curse” revisited

Argentino Pessoa

MPRA Paper from University Library of Munich, Germany

Abstract: The present paper deals with the role of political authorities and institutions in explaining growth failures. We aim to search answers for three related questions: is there a natural resources curse? Are all types of natural resources exposed to a curse? Can good institutions, measured by a single indicator, avoid this “curse”? Although the estimates presented are supportive of negative relation between growth and relative resources abundance, and of the idea that good institutions enhance growth, our investigation do not demonstrated that if the curse exists it only appears in countries with inferior institutions. So, the key conclusion is that there is no justification for the pessimistic conviction that certain countries will remain caught up in a low growth trap constrained with institutions that impede their growth. At the international level, the main policy implication is that, the support to countries with a high share of natural resources in its exports should be directed towards improving specific areas of control fault, such as public budget and improving organizational systems, rather than imposing on aid-recipient countries wide-ranging global governance measures, that are usually measured by a cross-section general used, but subjective, index.

Keywords: economic growth; institutions; natural resources curse; resource dependence; rent seeking (search for similar items in EconPapers)
JEL-codes: O13 O47 Q32 Q33 (search for similar items in EconPapers)
Date: 2008-05-05
New Economics Papers: this item is included in nep-env
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Citations: View citations in EconPapers (1)

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