We wish to thank Oriana Bandiera, Mark McGillivray, Per Pettersson Lidbom, Silvia Pezzini, Peter Skogman Thoursie and Fabrizio Zilibotti, as well as two anonymous referees for insightful comments. We also thank seminar participants at Stockholm School of Economics, Stockholm University, Uppsala University, and the EEA Annual Meeting (Madrid, 2004). Financial support from Jan Wallander's and Tom Hedelius' Foundation and from SIDA (grant SWE-2005-329) is gratefully acknowledged.
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Resource Curse or Not: A Question of Appropriability†
Article first published online: 19 NOV 2007
DOI: 10.1111/j.1467-9442.2007.00509.x
Additional Information
How to Cite
Boschini, A. D., Pettersson, J. and Roine, J. (2007), Resource Curse or Not: A Question of Appropriability. The Scandinavian Journal of Economics, 109: 593–617. doi: 10.1111/j.1467-9442.2007.00509.x
- †
Publication History
- Issue published online: 19 NOV 2007
- Article first published online: 19 NOV 2007
- First version submitted January 2005;final version received March 2007.
- Abstract
- Article
- References
- Cited By
Keywords:
- Natural resources;
- appropriability;
- property rights;
- institutions;
- economic growth;
- development
- O40;
- O57;
- P16;
- O13;
- N50
Abstract
Whether natural resources are good or bad for a country's development are shown to depend on the interaction between institutional setting and, crucially, the types of resources possessed by the country. Some natural resources are, for economical and technical reasons, more likely to cause problems such as rent-seeking and conflicts than others. This potential problem can, however, be countered by good institutional quality. In contrast to the traditional resource curse hypothesis, we show the impact of natural resources on economic growth to be non-monotonic in institutional quality, and increasingly so for certain types of resources. In particular, countries rich in minerals are cursed only if they have low-quality institutions, while the curse is reversed if institutions are sufficiently good. Furthermore, if countries are rich in diamonds and precious metals, these effects—both positive and negative—are larger.