The curse of natural resources

Sachs, Jeffrey D.; Warner, Andrew M.

doi:10.1016/s0014-2921(01)00125-8

Cited by 2,712 publications

(1,073 citation statements)

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“…The adverse effects of resource dependence on growth survive controlling for geography such as kilometres to closest airport, percentage land in tropics or incidence of malaria (Sachs and Warner, 2001). Natural resources can permanently boost income and welfare through higher human capital, and this can offset the direct negative effect of natural resources on the growth rate (Bravo-Ortega and De Gregorio, 2005).…”

Section: Natural Resource Curse Stronger In Presidential Democraciesmentioning

confidence: 99%

Natural Resources: Curse or Blessing?

Ploeg

2011

Journal of Economic Literature

1,317

177

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Are natural resources a "curse" or a "blessing"? The empirical evidence suggests either outcome is possible. The paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in non-democratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies. Terms of use: Documents inJEL-Code: C12, C13, E01, F43, K42, O41, Q30.

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Section: Natural Resource Curse Stronger In Presidential Democraciesmentioning

confidence: 99%

Natural Resources: Curse or Blessing?

Ploeg

2011

Journal of Economic Literature

1,317

177

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“…[Insert Figure 1 about here] Specifically, we study the impact of the growth and volatility of commodity prices on child mortality and, in doing so, extend previous work examining (i) the relationship between economic growth and natural resource endowments (e.g., Sachs and Warner, 2001) -the socalled resource curse and (ii) the linkages between such endowments and serious health conditions Gizelis, 2013, 2016;Sterck, 2016). Our focus on young children has a twofold rationale: firstly, improving child survival rates in the developing world is of the utmost importance as recognised by the UN and secondly, children are particularly vulnerable to diseases and other health risks related to either the quality of nutrition, or the quality of life more generally (see Galiani et al, 2005), both of which can be partially traced back to the global commodity market.…”

Section: Introductionmentioning

confidence: 88%

Child mortality, commodity price volatility and the resource curse

Makhlouf

Kellard

Vinogradov

2017

Social Science & Medicine

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Given many developing economies depend on primary commodities, the fluctuations of commodity prices may imply significant effects for the wellbeing of children. To investigate, this paper examines the relationship between child mortality and commodity price movements as reflected by country-specific commodity terms-of-trade. Employing a panel of 69 low and lower-middle income countries over the period 1970-2010, we show that commodity terms-of-trade volatility increases child mortality in highly commodity-dependent importers suggesting a type of 'scarce' resource curse. Strikingly however, good institutions appear able to mitigate the negative impact of volatility. The paper concludes by highlighting this tripartite relationship between child mortality, volatility and good institutions and posits that an effective approach to improving child wellbeing in low to lower-middle income countries will combine hedging, import diversification and improvement of institutional quality.

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“…Therefore, resource abundance might undermine the incentives to invest in human capital, thus resulting in lower economic growth. Entrepreneurship stimulates innovation and hence the economy, but it might be 'squeezed out' by resource abundance (Sachs and Warner, 2001). Similarly, industrial development is included, since the 'Dutch disease' effect implies that industry is likely to be crowded out by the resource in regions rich in resource.…”

Section: Benchmark Modelsmentioning

confidence: 99%

Resource Abundance and Resource Dependence in China

Magnus

Wang

2010

SSRN Journal

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This paper reconsiders the 'curse of resources' hypothesis for the case of China, and distinguishes between resource abundance, resource rents, and resource dependence. Resource abundance and resource rents are shown to be approximately equivalent, and their association with resource dependence varies with institutional quality. Resource abundance/rents has a positive impact on economic growth, while resource dependence has a negative impact. The impact of the 'West China Development Drive' policy, started in 2000, is substantial, and this is investigated through a comparative analysis based on cross-section samples, and through a panel-data timevarying coefficient approach for West and East provinces. Resource effects do change after the policy shock.JEL Classification: O11, O13, O53, C21, Q0, Q33.

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The curse of natural resources

Cited by 2,712 publications

References 9 publications

Natural Resources: Curse or Blessing?

Natural Resources: Curse or Blessing?

Child mortality, commodity price volatility and the resource curse

Resource Abundance and Resource Dependence in China

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