A more controversial view was the structuralist vision that suggests that the diversification towards manufactured goods is a necessary condition for sustained economic growth. This vision was derived from a normative interpretation of growth patterns in developed countries<sup>6</sup> or from the old theses of Prebisch (1950) and Singer (1950) on the downward trend in the terms of trade of raw material vis-à-vis manufactures. Not far from these arguments, a vast literature has been developed on the so-called “curse” caused by abundant natural resources (the Resource Curse). According to this view, an excessive dependence on the production and export of primary products harms development prospects. One of the reasons quoted most often for justifying this pessimism is the Dutch Disease effect hindering the development of other tradable and “modern” activities in the economy.<sup>7</sup> The empirical study of Sachs and Warner (2001) has been widely mentioned as a solid piece of evidence of the negative influence of abundant natural resources on economic growth. The study uses Barro-type growth regressions (i.e., multiple countries and periods) and finds a negative significant relationship with variables measuring the abundance of natural resources. Sachs and Warner conclude that the countries suffering this “curse” have to make particularly intense efforts to exit the low growth trap. The theoretical arguments underlying this pessimist vision have been revived in recent years with the conceptual framework presented in the work of Hausmann and Klinger (2007). Using measures of “distance” in the export production space, these authors suggest that the excessive specialization in minerals, hydrocarbons or agricultural products does not facilitate the appearance of new manufactured export goods. Hausmann and Klinger (2008) recommend an active state policy to foment the “discovery” of new export products in new sectors, pointing out that the scant development of new export activities in Peru is a serious flaw during the recent boom.

On the other hand, the so-called “curse” has been viewed with skepticism by another group of studies, for which the abundant natural resources and the specialization therein is not necessarily negative for development. The empirical evidence in favor of the “curse” found by Sachs and Warner is seriously questioned by Lederman and Maloney (2007), who follow the former‟s empirical framework to find that falling export diversification (i.e., greater export concentration) produces a negative effect on growth, canceling the effect of the variables measuring the abundance of natural resources. On the other hand, de Ferranti et. al. (2002) document cases of economies with abundant natural resources that have been able to develop rapidly with no need for active policies to foment the development of new products. Likewise, Bonaglia and Fukasaku (2003) argue that low-income economies with abundant natural resources can diversify their activities towards raw material processing and manufactured goods requiring natural inputs. In this sense, they refer to successful countries that have used their mineral and forest resources to develop knowledge-intensive sectors with a high technological content.

Brenton, Newfarmer and Walkenhorst (2007) criticize the excessive emphasis on programs focused exclusively on the development of certain types of products (e.g. manufactures) or on specific phases of the production cycle. They argue that approaches need to take into account each particular economy‟s mode of insertion into global markets. They recommend following a portfolio of measures to take advantage of different channels to enhance diversification, including (i) geographical diversification (e.g. by expanding the number of destinations for existing products), (ii) improvements of the quality of existing products, and (iii) taking advantage of opportunities for exporting services.

Although the empirical literature on the link between growth and export diversification is small, a few studies have found that export concentration is associated to a lower growth, confirming the findings of

> 6 The classical references on growth patterns are the work of Chenery (1979) and Syrquin (1989). As regards the diversification of exports, a recent application is the work of Carrere, Strauss-Kahn and Cadot (2007).

> 7  A complete literature review on the “resource curse” can be found in Sinnot et al (2010).

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