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dc.contributor.authorAREZKI, Rabah
dc.contributor.authorVAN DER PLOEG, Frederick
dc.date.accessioned2007-10-27T08:00:51Z
dc.date.available2007-10-27T08:00:51Z
dc.date.issued2007
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/7336
dc.description.abstractWe criticise existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness and initial income. These results do not survive once we use instrumental variables to correct for the endogenous nature of the explanatory variables. Furthermore, they suffer from omitted variables bias as they over-estimate the effect of initial income per capita and thus under-estimate the speed of conditional convergence. Instead, we provide new evidence for the impact of natural resource dependence on income per capita in a systematic empirical cross-country framework. In addition to a significant negative direct impact of natural resources on income per capita, we find significant indirect effect of natural resources on institutions. We allow for interaction effects and provide evidence that the natural resource curse is particularly severe for economic performance in countries with a low degree of trade openness. Adopting policies directed toward more trade openness may thus soften the impact of a resource curse. We also check the robustness of our results by using a variety of instruments and also employing the ratio of natural capital rather than natural resource exports to national income as an explanatory variable. We find evidence that resource abundance, measured by the stock of natural capital, also induces a resource curse, but less severely for countries that are relatively open.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2007/35en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectresource curseen
dc.subjectresource dependenceen
dc.subjectresource abundanceen
dc.subjectinstitutional qualityen
dc.subjectnatural capitalen
dc.subjectopennessen
dc.subjectgeographyen
dc.subjectinteraction effectsen
dc.subjectinstrumentsen
dc.subjectgrowth performanceen
dc.subjecttrade policiesen
dc.subjectincome per capitaen
dc.subjectcross-country evidenceen
dc.subjectC21en
dc.subjectC82en
dc.subjectO11en
dc.subjectO41en
dc.subjectQ30en
dc.titleCan the Natural Resource Curse Be Turned into a Blessing? The Role of Trade Policies and Institutionsen
dc.typeWorking Paperen
dc.neeo.contributorAREZKI|Rabah|aut|
dc.neeo.contributorVAN DER PLOEG|Frederick|aut|
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