does the resource curse hold for growth in genuine income as well summary existing studies analyzing the so called resource curse hypothesis regress growth in gross domestic product gdp on some measure of resource intensity this is problematic as gdp counts natural and other capital depreciation as income deducting depreciation from gdp to arrive at genuine income we test whether the curse still holds true we find supporting evidence but the growth disadvantage of resource intensive economies is slightly weaker in terms of genuine income than gdp we suggest that this provides additional but somewhat weak and limited evidence in support of those who argue that the curse is partly due to unsustainable overconsumption

natural disasters and human capital accumulation the empirical literature on the relationship between natural disaster risk and investment in education is inconclusive model averaging methods in a framework of cross country and panel regressions show an extremely robust negative partial correlation between secondary school enrollment and natural disaster risk this result is driven exclusively by geologic disasters exposure to natural disaster risk is a robust determinant of differences in secondary school enrollment between countries but not necessarily within countries natural disasters human capital education school enrollment bayesian model averaging

the lesser of two evils an empirical investigation of foreign direct investment pollution tradeoff this article investigates the relationship between foreign direct investment fdi and pollution measured by carbon dioxide co2 emissions the results suggest that while lax environmental regulations might attract fdi the foreign companies utilize less polluting technology as compared to local firms in low income countries thus fdi does not necessarily increase pollution levels in the host countries the findings therefore simultaneously support the pollution haven and the pollution halo hypotheses

learning to love the dutch disease evidence from the mineral economies abstract recent literature proposes that a booming minerals sector may not only lead to dutch disease effects it may also be a development curse mineral economy case studies have tentatively confirmed this recourse curse thesis this paper examines the long run economic and development performance of a more general grouping of mineral based economies and finds little corroborating evidence

stoking the fires co2 emissions and economic growth abstract we examine the relationship between economic development and carbon dioxide emissions a greenhouse gas central to global warming predictions estimates derived from global panel data suggest a diminishing marginal propensity to emit mpe carbon dioxide as gdp per capita rises despite this global carbon dioxide emissions growth will continue at 1 8 percent per annum for the foreseeable future a result that is not sensitive to average output growth instead emissions growth continues because output and population will grow most rapidly in lower income nations with high mpes this latter feature emphasizes the distributional consequences of policies to reduce emissions

natural resource abundance and economic growth this paper explores whether natural resource abundance leads other things equal to slower growth rates we distinguish between natural resource dependence rd and the natural resource endowment re we estimate three models using world bank data on national capital stocks in a one equation model we show that rd has a negative effect on growth rates apparently confirming the main results of the resource curse literature re however has a positive impact on growth we then estimate a twoequation model in which the impacts of re are much weaker finally we estimate a three equation model in which the impacts of natural resources on growth disappears

natural resource abundance and human capital accumulation summary this paper studies the link between resource abundance and human capital accumulation it reviews the commonly used indicators of resource abundance and human capital accumulation the case for a form of resource curse in human capital accumulation is not robust to reasonable changes in these indicators in fact subsoil wealth and resource rents per capita are shown to be significantly correlated with improved indicators of human capital accumulation if mineral wealth is what authors have in mind when they refer to natural resource abundance then they should choose indicators that measure this concept as accurately as possible

human capital and growth abstract this paper describes a growth model with the property that human capital accumulation can account for all observed growth the model is shown to be consistent with evidence on individual productivities as measured by census earnings data the central hypothesis is that we learn more when we interact with more productive people

oil governance and the mis allocation of talent in developing countries this paper sheds light on the relationship between oil rent and the allocation of talent toward rent seeking versus more productive activities conditional on the quality of institutions using a sample of 69 developing countries we demonstrate that oil resources orient university students toward specializations that provide better future access to rents when institutions are weak the results are robust to various specifications datasets on governance quality and estimation methods oil affects the demand for each profession through a technological effect indicating complementarity between oil and engineering manufacturing and construction however it also increases the size of the cake therefore when institutions are weak oil increases the incentive to opt for professions with better access to rents law business and the social sciences rather than careers in engineering creating a deviation from the optimal allocation between the two types of specialization

corruption and the extractive industries transparency initiative the extractive industries transparency initiative eiti has received much attention as a scheme that can help reduce corruption in mineral rich developing economies to our knowledge this paper provides the first empirical attempt using panel data to explore how eiti membership links to changes in corruption levels we also examine whether the different stages in eiti implementation initial commitment candidature full compliance influence the pace of changes in corruption we find that eiti membership offers on the whole a shielding mechanism against the general tendency of mineral rich countries to experience increases in corruption over time

the quality of political institutions and the curse of natural resources we propose a theoretical model to explain empirical regularities related to the curse of natural resources which emphasises the behaviour and incentives of politicians we extend the standard voting model to give voters political control beyond the elections this gives rise to a new restriction that policies should not give rise to a revolution our model clarifies when resource discoveries might lead to revolutions namely in countries with weak institutions it also suggests that for bad political institutions human capital depends negatively on natural resources while for high institutional quality the dependence is reversed this finding is corroborated in cross section regressions

mineral wealth and human capital accumulation a nonparametric approach this article uses a nonparametric approach to investigate the nexus between mineral wealth and human capital accumulation across countries higher mineral wealth is associated with elevated levels

oil price shocks income and democracy he effect of natural resource wealth and income on political institutions is a central issue at the intersection of economics and political sciences we contribute to this research by examining the effect of international oil price fluctuations on democratic institutions over the 1960 2007 period we also exploit the very persistent response of aggregate income to oil prices to study the effect of persistent oil price driven income shocks on democracy our results indicate that countries with greater net oil exports over gdp see improvements in democratic institutions following upturns in international oil prices for example positive oil price shocks lead to improvements in the polity democracy score as well as the subscores for executive constraints executive recruitment and political competition and a higher probability of a democratic transition we estimate that an oil price driven 1 percentage point increase in per capita gdp growth increases the polity democracy score by around 0 2 percentage points on impact and by around 2 percentage points in the long run the effect on the probability of a democratic transition is around 0 4 percentage points our work relates to the literature on the link between political institutions and natural resource wealth and income an influential early contribution is lipset 1959 who documents that high income countries tend to be more democratic he argues that this positive correlation arises because higher per capita income is a symptom of the modernization of society and that modernization also increases citizens demand for political participation the positive association between income and democracy has also been emphasized by huntington 1991 who holds that higher per capita income was one of the key factors behind the

natural resources education and economic development economic growth since 1965 has varied inversely with the share of natural capital in national wealth across countries four main channels of transmission from abundant natural resources to stunted economic development are discussed a the dutch disease b rent seeking c overconfidence and d neglect of education public expenditure on education relative to national income expected years of schooling for girls and gross secondary school enrolment are all shown to be inversely related to the share of natural capital in national wealth across countries natural capital appears to crowd out human capital thereby slowing down the pace of economic development

demographic transition in resource rich countries a blessing or a curse summary this study argues that resource wealth is a key factor for understanding income effects of demographic transition we develop a simple model highlighting how the income effect of increased labor supply may depend on resource rents and provide empirical evidence that support the theoretical predictions using panel data covering the period from 1982 to 2006 for more than 120 countries we find a negative interaction effect between resource wealth and demographic transition on national income moreover the negative interaction effect does not depend on institutional quality and is found also across different samples

increasing returns and the genesis of american resource abundance the usa became the world s leading mineral producing nation between 1870 and 1910 a development paralleled by the rising resource intensity of american manufacturing this paper challenges the premise that resource abundance simply reflected the country s geological endowment of mineral deposits instead in the century following 1850 the usa exploited its natural resource potentials to a far greater extent than other countries and did so across virtually the entire range of industrial minerals the paper argues that natural resource abundance was an endogenous socially constructed condition that was not geologically preordained it examines the complex legal institutional technological and organizational adaptations that shaped the us supply responses to the expanding domestic and international industrial demands for minerals and mineral products it suggests that strong positive feedbacks even in the exploitation of depletable resources were responsible for the explosive growth of the american minerals economy

natural resource dependence human capital accumulation and economic growth a combined explanation for the resource curse and the resource blessing abstract in existing studies no consensus has been reached on the relationship between natural resource dependence and human capital accumulation to narrow the divergence this paper carries out a normative research to explain the co existence of the phenomena of the resource curse and the resource blessing based on an organic combination of conceptual and mathematical models it first establishes a conceptual model to analyse the potential effects of the government s policy preference and natural resource development activities on human capital accumulation and economic growth furthermore it develops an endogenous growth model to normatively illuminate the effects in the conceptual model and to explore the condition for the occurrence of the resource curse the conceptual model analysis indicates that the rate of return on education investment and government behaviours play the crucial role in promoting the formation of the economic virtuous circle at the micro level and macro level respectively while resource development activities exert dual impacts on the circle the main mechanisms in the conceptual model can be validated in the mathematical model the rise in the subjective discount rate the elasticity of intertemporal substitution and resource goods price are adverse to the economic virtuous circle while high quality education and the institutional environment giving priority to manufacturing can become the necessary condition and sufficient condition for forming the circle respectively the allocation efficiency of production factors plays a decisive role in whether the blessing occurs whereas sufficient human capital is an essential guarantee for evading the curse

minerals institutions openness and growth an empirical analysis competing explanations of the resource curse are tested using panel data the data support the existence of a mineral resource curse for developing countries with weak institutions consistent with the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital to the detriment of growth in other sectors of the economy manufacturing imports substitute for the development of domestic production so openness to trade correlates with lower growth in mineral dependent economies the dutch disease and debt overhang explanations of the resource curse are not supported

environmental policy when market structure and plant locations are endogenous abstract a two region two firm model is developed in which firms choose the number and the regional locations of their plants both firms pollute and market structure is endogenous to environmental policy there are increasing returns at the plant level imperfect competition between the home and the foreign firm and transport costs between the two markets at critical levels of environmental policy variables small policy changes cause large discrete jumps in a region s pollution and welfare as a firm closes or opens a plant or shifts production to from a foreign branch plant the implications for optimal environmental policy differ significantly from those suggested by traditional pigouvian marginal analysis

reconciling the conflict between the pollution haven hypothesis and an emerging trajectory of international technology transfer abstract many developing countries have relied on technology transfer through foreign direct investment fdi from developed countries as a primary means of technology acquisition however recent increased global eco consciousness and linking of trade and investment with environmental issues has the potential of disrupting these investment flows this paper investigates the validity of the pollution haven hypothesis which claims that an open market regime will encourage the flow of generally low technology polluting industries to developing countries from a neo technology trade perspective in the process an emerging trajectory of international technology transfer favoring high technology industries is established this paper concludes that positive measures enhancing fdi is not only crucial for technology upgrading but at the same time brings about enhanced environmental welfare through transfer of eco friendly products and production processes

ecological empowerment and enterprise zones pain free transitions to sustainable production in cities or fool s gold abstract an enterprise zone ez based on cleaner production is an increasingly popular government policy to accelerate the sustainable cities agenda the purpose of this review paper is to critique ez theory and the credibility of policy transfer to sustainable production in cities to this end we undertook a literature review on ez theory produced a survey of cleaner production ezs to highlight its application in england and developed a conceptual framework for a triple bottom line form of ez based on our findings we argue that for the credible transfer of ez theory to the sustainable cities agenda policy should align to our conceptual framework for an ecological empowerment and enterprise zone eeez the eeez is an ez which is ecologically restorative places an emphasis on community involvement to better harness market forces and understands the utility of state with the public sector as an entrepreneur these research results will be of value to the literature focused on spatial low carbon enterprise strategy

the resource curse what have we learned from two decades of intensive research introduction to the special issue there has been increasing interest in the so called resource curse that is the tendency of resource rich countries to underperform in several development outcomes this has generated a mountain of often contradictory evidence leaving many floundering in the flood of information this special issue compiles eight papers from some of the most prominent contributors to this literature combining original research with critical reflection on the current stock of knowledge the studies collectively emphasise the complexities and conditionalities of the curse its presence intensity is largely context specific depending on the type of resources socio political institutions and linkages with the rest of the economy

globalization and the politics of natural resources much political science scholarship including important work in this journal has explored the implications of natural resource endowments particularly oil and other highly valuable export commodities on political and economic outcomes although the first wave of literature emphasized the negative effects of these resources more recent work emphasizes how domestic institutions can condition the relationship sometimes leading to positive effects in this special issue the authors expand this literature in two important ways first they renew attention on the international dimensions of this relationship exploring how trade migration foreign investment and other global forces influence the effects these resources have on countries second they link the study of the globalization natural resources nexus to broader debates in international and comparative political economy such as how domestic institutions shape the impact of globalization and how economic factors affect the political survival of r

corruption and the political economy of resource based development a comparison of asia and sub saharan africa we model how the supply and demand for bribes affects resource use by an economy and the reinvestment of resource rents in other assets this requires adjusting the world bank s measure adjusted net savings for any rent dissipation due to corruption the impacts of corruption on long run changes and periodic growth in the adjusted net savings rate are estimated across african and asian economies from 1970 to 2003 corruption rather than resource dependency per se affects negatively the ability of african countries to reinvest resource rents in the short term but for asian countries corruption is less important than point resources corruption influences long run growth in adjusted net savings rates in all countries and is also the pathway through which this growth is affected by patterns of resource use trade and abundance

commodity prices and growth in africa a frican economies export primary commodities and most export little else policymakers as well as economists and historians of african economic development have seen these exports as both a hope and a curse the following parable tells the story once upon a time a servant of the ruler discovered a miraculous plant which grew readily in that country and whose seeds could be woven into fine cloth so desirable was this fabric that it became prized all over the world and fetched a high price after two score years the plant accounted for most of the country s trade with the world the ruler ordered the peasants to grow the plant paid them only a fraction of its price and he and his nobles became fabulously wealthy because the ruler wished to be remembered as a great ruler and as the father of his country he used his wealth to build a great army and brought machines from foreign countries to make the fine goods that previously could only be obtained from foreign merchants but the machines often broke down and the goods that they made were of poor quality and after the ruler died they were left to rust under the ruler s successor there was a war in a foreign land where the plant also grew so that there was a great shortage and its price increased threefold in only three seasons the new ruler spent his newfound riches on fantastic extravagance while immense sums were expended on public works after the manner of the east and on productive works carried out in the wrong way or too soon not even the threefold increase in prices could support these expenditures and the country soon found itself deeply in debt when the war ended and the price fell the country could no longer pay the interest on its debt or borrow more money even after it had sold its only useful public work to a foreign power so that power sent a mission to the country the publication of whose report from which the above

cursing the blessings natural resource abundance institutions and economic growth summary since sachs and warner s sachs j d warner a m 1995a natural resource abundance and economic growth nber working paper no 5398 contribution there has been a lively debate on the so called natural resource curse this paper re examines the effects of natural resource abundance on economic growth using new measures of resource endowment and considering the role of institutional quality we find a positive direct empirical relationship between natural resource abundance and economic growth in both ols and 2sls regressions the positive resource effects are particularly strong for subsoil wealth our results also show no evidence of negative indirect effects of natural resources through the institutional channel

natural resources a curse on education spending abstract in line with the rising interest in harnessing natural resource revenues for economic and human development through productive government investments this paper aims to address an important blind spot in our understanding of the resource curse by contributing innovative insights on how natural resource wealth impacts government priorities and expenditure practices using a large panel dataset of 140 countries covering the period from 1995 to 2009 we find an adverse effect of resource dependence on public education expenditures relative to gdp that is robust to controlling for a range of additional covariates furthermore our findings indicate that this resource curse effect on the government prioritization of education mainly stems from point source natural resources these results are of particular importance for the sustainable management of natural resource wealth in developing countries as they could achieve especially high returns by investing resource revenues in public goods such as education while this paper underlines the importance of institutions and government accountability our findings also raise questions on the role of the private sector as a partner in development as the extractives industry could consider increasing funding for education through corporate social responsibility csr initiatives

mining away the preston curve summary i estimate the long term national health and education impacts of having a larger mining share in the economy by instrumenting the relative size of the mining sector with the natural geological variation in countries fossil fuel endowments i provide evidence suggestive of a causal relationship the findings suggest that countries with larger mining shares tend to have poorer health and education outcomes than countries with similar per capita incomes geographic characteristics and institutional quality doubling the mining share of an economy corresponds to on average the infant death rate being 20 higher life expectancy being 5 lower total years of education being 20 lower and 70 more people having no formal education divergences from the preston curve the concave relationship between cross country income and life expectancy that has long been of interest to economists demographers and epidemiologists are thus partly explained by the size of the mining sector within country evidence from indonesia paints a similar picture my results provide support for a growing body of evidence linking mining to poorer average living standards particularly vis a vis other types of income i also estimate the effects of national mining dependence on non mining income health and education investment and institutions

the elusive curse of oil abstract our goal is to show that contrary to the claims made in several recent papers the effect of a large endowment of oil and other mineral resources on long term economic growth of countries has been on balance positive moreover the claims of a negative effect of oil and mineral wealth on the countries institutions are called into question

oil and democracy endogenous natural resources and the political resource curse by the end of the twentieth century a scholarly consensus emerged around the idea that oil fuels authoritarianism and slow growth the natural abundance once thought to be a blessing was unconditionally and then later only conditionally a curse for political and economic development we re examine the relationship between oil wealth and political regimes challenging the conventional wisdom that such natural resource rents lead to authoritarian outcomes we contend that most efforts to examine the causal linkages between natural resource abundance and political regime have been complicated by the likelihood that both democracy and oil revenue are endogenous to the industrialization processes itself particularly in its developmentalist form our quantitative results based on an analysis of global data from 1970 to 2006 show that both resource endogeneity and several mechanisms of intraregional regime diffusion are powerful determinants of democratic outcomes qualitative evidence from the history of industrialization in latin america yields support for our proposed causal claim oil wealth is not necessarily a curse and may even be a blessing with respect to democratic development