Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth

Brunnschweiler, Christa N.

doi:10.2139/ssrn.928330

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Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth

CER-ETH - Center of Economic Research at ETH Zurich, Working Paper No. 06/51

31 Pages Posted: 5 Sep 2006

See all articles by Christa N. Brunnschweiler

Christa N. Brunnschweiler

Norwegian University of Science and Technology (NTNU) - Department of Economics; University of Oxford - OxCarre

Date Written: June 27, 2006

Abstract

Since Sachs and Warner's (1995a) contribution, there has been a lively debate on the so-called natural resource curse. This paper re-examines the effects of natural resource abundance on economic growth using new measures of resource endowment and considering the role of institutional quality. We find a positive direct empirical relationship between natural resource abundance and economic growth. In both OLS and 2SLS regressions, the positive resource effects are particularly strong for subsoil wealth. Our results also show no evidence of negative indirect effects off-natural resources through the institutional channel.

Keywords: Natural resources, resource curse, economic growth, institutional

JEL Classification: O11, O13, Q0

Suggested Citation: Suggested Citation

Brunnschweiler, Christa N., Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth (June 27, 2006). CER-ETH - Center of Economic Research at ETH Zurich, Working Paper No. 06/51, Available at SSRN: https://ssrn.com/abstract=928330 or http://dx.doi.org/10.2139/ssrn.928330