The Natural Resource Curse: A Survey

Frankel, Jeffrey A.

doi:10.2139/ssrn.1565588

Cited by 167 publications

(203 citation statements)

References 141 publications

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“…A multitude of studies such as Salai-Martin (1997) or Doppelhofer et al (2000) confirm this and analyze the RC from various points of view, identifying multiple determinants as well as transmission channels (Papyrakis and Gerlagh 2004), and constructing numerous theories and hypotheses concerning the ways in which resource dependence may hamper economic development (Ross 1999;Rosser 2006). 22 Overviews by Van der Ploeg (2011) or Frankel (2012 divide these theories in different exogenous and endogenous explanations, which Boos andHolmMüller (2012, 2013) relate to the individual calculation components of GS rates. We use these in the following to understand the relationship between volatile world market prices (Sect.…”

Section: Overviewmentioning

confidence: 99%

The Zambian Resource Curse and its influence on Genuine Savings as an indicator for “weak” sustainable development

Boos

Holm‐Müller

2015

Environ Dev Sustain

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The empirical evidence that economies predominantly reliant on their natural resources are characterized by slower economic growth-the so-called Resource Curse (RC)-is in many ways confirmed by the case of Zambia. Haber and Menaldo (Am Polit Sci Rev 105(1):1-26, 2011) identify Zambia's extreme dependence on copper exports as one of the worldwide most striking examples for a country suffering from this ''curse.'' In topical literature, the RC is traced back to the generation of natural resource rents regardless of economic performance, which among other problems leads to suboptimal reinvestment. The World Banks indicator for the ''weak'' sustainable development of a country-the so-called Genuine Savings (GS)-considers exactly this reinvestment of rents from the depletion of natural capital rents into physical or human capital. Although it has been shown empirically that countries dependent on primary exports on average feature negative GS rates and that the determinants of the RC influence both present economic growth and future sustainability as measured by GS, no case studies have been conducted to confirm this. Against this background, we qualitatively survey the relationship between the most discussed determinants causing the RC in Zambia and the country's GS rate. We show that all theoretical relationships between the GS rates of a country and RC determinants such as consumption behavior, volatile world market prices, the so-called Dutch disease as well as political and institutional structures apply to Zambia between 1964 and 2010: an extreme dependency on copper exports and insufficient reinvestments of income from the depletion of Zambia's natural capital constitutes one of the main reasons for slow growth and negative GS until the copper price booms in the second half of the 2000s.

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Section: Overviewmentioning

confidence: 99%

The Zambian Resource Curse and its influence on Genuine Savings as an indicator for “weak” sustainable development

Boos

Holm‐Müller

2015

Environ Dev Sustain

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“…The reason for not using exchange rate is that Lao PDR has adopted "Crawling band around US dollar" as its currency regime during sample period, according to Ilzetzki et al (2011). Frankel (2010 argued in the context of Dutch Disease that the real appreciation in the currency takes the form of nominal currency appreciation if the country has a floating exchange rate, whereas taking the form of money inflows and inflation if the country has a fixed exchange rate.…”

Section: Data For Key Variablesmentioning

confidence: 99%

“…Frankel (2010 argued in the context of Dutch Disease that the real appreciation in the currency takes the form of nominal currency appreciation if the country has a floating exchange rate, whereas taking the form of money inflows and inflation if the country has a fixed exchange rate. Since the Lao currency regime is closer to a fixed one, we use inflation rate as a proxy of real exchange rate by following the argument of Frankel (2010). The data for inflation rate is taken from World Economic Outlook Database October 2016 of International Monetary Fund as the series of "average consumer prices, Dec. 2005=100".…”

Section: Data For Key Variablesmentioning

confidence: 99%

The Resource Curse Hypothesis in Lao Economy

Khinsamone

2017

JAD

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The purpose of this paper is to investigate the adaptability of the resource curse hypothesis for Lao economy. The study verifies the two crowding-out logics that resource abundance would crowd out manufacturing activities and/or savings and investment, by examining their causalities and impulse responses in a vector auto-regression (VAR) model estimation. The estimation outcomes implied the existence of the resource curse in Lao economy: resource production has crowded out manufacturing activities through real exchange rate appreciation, thereby causing the Dutch Disease; and resource production has not contributed significantly to capital accumulation, thereby being not consistent with Hartwick-rule. The study contributed to the literature by verifying two kinds of crowding-out logics on the resource curse by applying a VAR model: the crowding-out of manufacturing activities as a sectoral allocation, and the crowding-out of savings and investment as an intertemporal allocation. The study might also be valuable to the policy makers, since it proposed a strategy for transforming Lao economic structure from "resource curse" to "resource blessing" by setting up some institutional framework to allocate resource revenues to infrastructure development.

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“…Sachs and Warner provide data 1 Here and henceforth, we use the term 'mineral' to refer to mining, oil and gas products. 2 For a more extensive review of the literature, see Davis (2005), Stevens (2005), and Frankel (2010). 3 According to Google Scholar, the three working papers had been cited a total of 1,776 times as of 7 September 2010.…”

Section: The Resource Cursementioning

confidence: 99%

“…There is some evidence of residual crowding out effects associated with mineral and energy production, but they are not as large as originally thought and their certainty is statistically questionable. This result requires an examination of the antidotes for the resource curse that include tariff and non-tariff barriers, marketing boards, export controls, and exchange rate policies or sterilization efforts to offset the deindustrialization and export revenue volatility that accompanies mineral production (van Wijnbergen 1984;Sachs and Warner 1995b;Frankel 2010).…”

mentioning

confidence: 99%