The Elusive Curse of Oil

Alexeev, Michael; Conrad, Robert F.

doi:10.2139/ssrn.806224

“…The causality of the relationship between natural resource wealth and authoritarian regimes however, remains subject of debate (Haber and Menaldo, 2011;Alexeev and Conrad, 2009). …”

Section: Democracymentioning

confidence: 99%

Extending the concept of the resource curse: Natural resources and public spending on health

Cockx

¹

,

Francken

²

2014

Ecological Economics

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This paper extends the concept of the resource curse by studying whether and through which transmission channels natural resource wealth affects social spending. Even though the availability of vast natural capital reserves has commonly been linked to the neglect of human development, most of the literature has continued to focus on economic performance. This paper is the first to empirically investigate the link between natural resource wealth and public health expenditures in light of the hypothesis that resource wealth as a source of unearned state income enhances state autonomy and increases volatility, which leads to policies that fail to prioritize human development. Using a large panel dataset of world countries covering the period from 1995 to 2009, we find a robust, significant inverse relationship between natural resource dependence, and even abundance, and public health spending over time. The effect remains significant after controlling for state autonomy, volatility, and other factors.These findings have implications for national authorities as well as the extractive industry. Governments should be made accountable for natural resource wealth and correct taxation could provide additional resources, earmarked for health. The extractive industry could increase their investments in sustainable Corporate Social Responsibility operations, specifically in the health sector.

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“…Sachs & Warner (1995) and its various extensions model 2 resource wealth as resource exports as a percentage of GDP. However, as Brunnschweiler & Bulte (2008) and Alexeev & Conrad (2009) point out, using resource dependence creates an endogeneity problem; poor growth resulting from structural factors independent of resource wealth will cause a lower GDP, and thus a higher share of resources in GDP. This creates a possible omitted variable bias, where whatever unobserved structural factors cause high dependence will likely impact subsequent performance.…”

Section: Introductionmentioning

confidence: 99%

The resource curse exorcised: Evidence from a panel of countries

Smith¹

2015

Journal of Development Economics

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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. This paper evaluates the impact of major natural resource discoveries since 1950 on GDP per capita and other economic and social indicators. Using panel fixed-effects estimation ad resource discoveries in countries that were not previously resource-rich, I find a positive effect on GDP per capita following extraction that persists in the long term, in contrast with much of the resource curse literature that uses cross-sectional designs. I also find positive effects on education levels, reductions in infant mortality, and negative effects on democratic institutions. I further test these outcomes with synthetic control analysis, yielding results consistent the fixed-effects model. and resource discoveries in countries that were not previously resource-rich, I find a positive effect on GDP per capita following extraction that persists in the long term, in contrast with much of the resource curse literature that uses cross-sectional designs. I also find positive effects on education levels, reductions in infant mortality, and negative effects on democratic institutions. I further test these outcomes with synthetic control analysis, yielding results consistent the fixed-effects model. Terms of use: Documents in

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“…Sachs and Warner (1995) This phenomenon is called the "natural resource curse" (Auty 1993, Auty and Mikesell, 1998 Alexeev and Conrad (2009) argue that the effects of resource endowments could be hindered by the relative shortness of the time period examined. Canuto and Cavallori (2012) suggest that intangible wealth in the form of governance quality is the determining factor in economic growth, not natural resource abundance.…”

Section: Mechanisms Of the Natural Resource Cursementioning

confidence: 99%

Papua New Guinea and the Natural Resource Curse

Avalos

¹

,

Stuva

²

,

Heal

³

et al. 2015

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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. The ARTNeT Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about trade issues. An objective of the series is to publish the findings quickly, even if the presentations are less than fully polished. ARTNeT working papers are available online at www.artnetontrade.org. All material in the working papers may be freely quoted or reprinted, but acknowledgment is requested, together with a copy of the publication containing the quotation or reprint. The use of the working papers for any commercial purpose, including resale, is prohibited. Terms of use: Documents in EconStor may Disclaimer:The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. Where the designation "country or area" appears, it covers countries, territories, cities or areas. Bibliographical and other references have, wherever possible, been verified. The United Nations bears no responsibility for the availability or functioning of URLs. The views expressed in this publication are those of the authors and do not necessarily reflect the views of the United Nations. The opinions, figures and estimates set forth in this publication are the responsibility of the authors, and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations. Any errors are the responsibility of the authors. Mention of firm names and commercial products does not imply the endorsement of the United Nations.© ARTNeT 2013 This may also be exacerbated by large scale exports of liquefied natural gas (LNG) in future years. In addition, the paper finds that extractive industry governance is a pressing challenge for PNG and makes suggestions for reform in revenue management and spending. Executive SummaryThe 'natural resource curse' refers to the observation that some natural resource-rich countries experience lower economic growth than some natural resource-poor countries. For countries like Papua New Guinea (PNG), which rely on the extraction of natural resources (NR), the possibility of such a 'curse' is a pressing concern.Studies have identified three channels that could lead to a negative relationship between an abundance of natural resourc...

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The Elusive Curse of Oil

Cited by 91 publications

References 13 publications

Extending the concept of the resource curse: Natural resources and public spending on health

Extending the concept of the resource curse: Natural resources and public spending on health

The resource curse exorcised: Evidence from a panel of countries

Papua New Guinea and the Natural Resource Curse

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