Corruption, Development and the Curse of Natural Resources
Pendergast, S.M. ; Clarke, J.A. ; Kooten, G.C. van - \ 2011
Canadian Journal of Political Science 44 (2011)02. - ISSN 0008-4239 - p. 411 - 437.
cross-section-data - civil-war - growth - greed
In 1995, Jeffrey Sachs and Andrew Warner found a negative relationship between natural resources and economic growth, and claimed that natural resources are a curse. Their work has been widely cited, with many economists now accepting the curse of natural resources as a welldocumented explanation of poor economic growth in some economies (e.g., Papyrakis and Gerlagh, 2004; Kronenberg, 2004). In this paper, we provide an alternative econometric framework for evaluating this claim, although we begin with a discussion of possible explanations for the curse and a critical assessment of the extant theory underlying the curse. Our approach is to identify natural resources that have the greatest rents and potential for exploitation through rent-seeking agents. The transmission mechanism that we specify works through the effect that rent seeking has on corruption and how that, in turn, impacts wellbeing. Our measure of wellbeing is the Human Development Index, although we find similar results for per capita GDP. While we find that resource abundance does not directly impact economic development, we do find that petroleum resources are associated with rent-seeking behavior that negatively affects wellbeing. Our regression results are robust to various model specifications and sensitivity analyses.
Natural Resources and Violent Conflict: Resource Abundance, Dependence and the Onset of Civil Wars
Brunnschweiler, C.N. ; Bulte, E.H. - \ 2009
Oxford Economic Papers 61 (2009)4. - ISSN 0030-7653 - p. 651 - 674.
economic-growth - curse - diamonds - wealth - greed - oil - institutions - governance - intensity - ethnicity
In this paper we examine the claim that natural resources invite civil conflict, and challenge the main stylized facts in this literature. We find that the conventional measure of resource dependence is endogenous with respect to conflict, and that instrumenting for dependence implies that it is no longer significant in conflict regressions. Instead, it appears that conflict increases dependence on resource extraction (as a default sector). Moreover, resource abundance is associated with a reduced probability of the onset of war. These results are robust to a range of specifications and, considering the conflict channel, we conclude there is no reason to regard resources as a general curse to peace and development