Is the Resource Curse a Myth?

GAB | The Global Anticorruption Blog

Perhaps one of the most surprising and influential findings in development economics research is the so-called “resource curse”: the idea that a large natural resource endowment (and, consequently, a significant role for natural resource exports in the national economy) actually leads to slower economic growth, and lower per capita incomes (at least in the long term). The resource thesis has the appealing feature that although it’s initially counter-intuitive (and so people like me can seem and feel clever when we point it out), one can immediately think of many salient examples that seem to corroborate the idea, and it’s fairly easy to construct plausible stories as to why it would be true. Although such stories originally focused on exchange rate appreciation (so-called “Dutch Disease”), contemporary research (see, e.g., here and here) tends to focus more on the impact of natural resource abundance on institutional quality…

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