Cursed by Resources or Institutions?

Journal article

Mehlum, Halvor; Karl Ove Moene & Ragnar Torvik (2006) Cursed by Resources or Institutions?, World Economy 29 (8): 1117–1131.

Natural resource-abundant countries constitute both growth losers and growth winners, and the main difference between the success cases and the cases of failure lies in the quality of institutions. With grabber-friendly institutions more natural resources push aggregate income down, while with producer-friendly institutions more natural resources increase income. Such a theory finds strong support in data. A key question we also discuss is if resources in addition alter the quality of institutions. When that is the case, countries with bad institutions suffer a double resource curse - as the deterioration of institutions strengthens the negative effect of more natural resources.

An error has occurred. This application may no longer respond until reloaded. Reload 🗙