Natural Resources and Reforms

30 Pages Posted: 20 Apr 2016

See all articles by Mohammad Amin

Mohammad Amin

World Bank - Enterprise Analysis Unit

Simeon Djankov

London School of Economics & Political Science (LSE); Peterson Institute for International Economics

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Date Written: March 1, 2009

Abstract

The authors use a sample of 133 countries to investigate the link between the abundance of natural resources and micro-economic reforms. Previous studies suggest that natural resource abundance gives rise to governments that are less accountable to the public and states that are oligarchic, and that it leads to the erosion of social capital. These factors are likely to hamper economic reforms. The authors test this hypothesis using data on micro-economic reforms from the World Bank's Doing Business database. The results provide a robust support for the "resource curse" view: a move from the 75th percentile to the 25th percentile on resource abundance equals 10.9 percentage points more reform. This is a large effect given that the mean probability of reform in the sample is 57.1 percent.

Keywords: Economic Theory & Research, Emerging Markets, E-Business, Achieving Shared Growth, Inequality

Suggested Citation

Amin, Mohammad and Djankov, Simeon, Natural Resources and Reforms (March 1, 2009). World Bank Policy Research Working Paper No. 4882, Available at SSRN: https://ssrn.com/abstract=1372959

Mohammad Amin

World Bank - Enterprise Analysis Unit ( email )

2121 Pennsylvania Avenue, NW
Washington, DC 20433
United States

Simeon Djankov

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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