Resource Curse or Not: A Question of Appropriability

25 Pages Posted: 20 Nov 2007  

Anne Boschini

Stockholm University - Swedish Institute for Social Research (SOFI)

Jan Pettersson

Stockholm University

Jesper Roine

Stockholm School of Economics - Department of Economics

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.

Suggested Citation

Boschini, Anne and Pettersson, Jan and Roine, Jesper, Resource Curse or Not: A Question of Appropriability. Scandinavian Journal of Economics, Vol. 109, No. 3, pp. 593-617, September 2007. Available at SSRN: https://ssrn.com/abstract=1031542 or http://dx.doi.org/10.1111/j.1467-9442.2007.00509.x

Anne Daniela Boschini (Contact Author)

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

SE-106 91 Stockholm
Sweden
+468162229 (Phone)

Jan Pettersson

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Jesper Roine

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden
+46-8-7369000 (Phone)

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