Are rich countries immune to the resource curse? Evidence from Norway's management of its oil riches

Abstract

Abstract:Growth studies show, counter to intuition, that the discovery of a natural resource may be a curse rather than a blessing since resource-rich countries grow slower than others. But it has been suggested that Norway may be an important exception to the curse and that the curse does not afflict rich countries. This article addresses both issues, and introduces a new diagnostic test. Neighbor countries Denmark and Sweden are used to highlight Norway's relative development and to test for curse presence. I employ a structural break technique to demonstrate that Norway started an acceleration in the early 70s, after having discovered oil in 1969, and did not experience a pronounced retardation for the next 25 years. Instead, after first catching-up with its neighbors, Norway maintained a higher pace of growth. Norway might have escaped the curse. However, data suggest a slow-down at the end of the period, opening the possibility of a late onset of the curse. If so, rich countries are not immune.

Interaction effects between economic development and forest cover determine deforestation rates

“…Warner, 1995, 2001;Neumayer, 2004). However, analysis of the underlying mechanisms indicate that this effect is due almost entirely to the presence of weak governments, bad macroeconomic policies, and poor institutions, suggesting that the resources themselves are not responsible (Mikesell, 1997;Auty, 2001;Papyrakis and Gerlagh, 2004;Larsen, 2005). Furthermore, the resource curse is most directly applicable to 'point' resources, such as oil and mineral deposits, which are concentrated in space and so relatively easy to protect and control (Bulte et al, 2005).…”

Resource Curse: New Evidence on the Role of Institutions

“…They find that countries like the U.S., Canada, Norway, and Australia are curse-free and enjoy high economic growth due to their producer-friendly institutions with exceptionally high quality (Larsen 2005). However, their study does not clearly differentiate between good qualities that are associated with the producer-friendly institutions in contrast to the grabber-friendly ones.…”

Delivering Enduring Benefits from a Gas Development: governance and planning challenges in remote Western Australia

“…It has been argued that countries that specialise in primary products are prone to suffer Dutch disease 1 problems and rent-seeking behaviour (Sachs & Warner 2001), prompting conjecture as to whether an abundance of natural resources is a blessing or a boon for local socio-economic development (Davis & Tilton 2005;Maconachie & Binns 2007;Pineda & Rodriguez 2010). There have also been counter-arguments which show that 'rich countries' such as Canada, Norway and Germany have benefited from natural resource wealth as a result of well-designed public policy and strong institutions and institutional frameworks (Davis & Tilton 2005;Larsen 2005;Brunnschweiler 2008;Brunnschweiler & Bulte 2008). Gilmore (1976, p. 535) states that 'the energy boom town in western United States is apt to be a bad place to live and a bad place to do business' because inevitably, there will be unmanaged growth which results in a 'cumulative result of many different corporate, governmental and individual decisions, mostly made in isolation from each other [.…”