Natural Resources and Reforms

28 Pages Posted: 20 Mar 2009  

Mohammad Amin

World Bank - Development Research Group (DECRG); World Bank - Enterprise Analysis Unit

Simeon Djankov

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

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Date Written: March 20, 2009

Abstract

We 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, states that are oligarchic, and that it leads to the erosion of social capital. These factors are likely to hamper economic reforms. We 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, a large effect given that the mean probability of reform in the sample is 57.1%.

Keywords: Reform, Natural resources, Regulation

JEL Classification: Q0, O25, K2, L51

Suggested Citation

Amin, Mohammad and Djankov, Simeon, Natural Resources and Reforms (March 20, 2009). Available at SSRN: https://ssrn.com/abstract=1366034 or http://dx.doi.org/10.2139/ssrn.1366034

Mohammad Amin (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
F 4P-238
Washington, DC 20433
United States
202-473-1915 (Phone)

World Bank - Enterprise Analysis Unit

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

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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