The Natural Resource Curse and Fiscal Decentralization
American Journal of Agricultural Economics, Forthcoming
49 Pages Posted: 18 Jan 2011 Last revised: 6 Aug 2015
Date Written: April 15, 2015
Abstract
Natural resource abundance is a blessing for some countries, but a curse for others. We show that differences across countries in the degree of fiscal decentralization can contribute to this divergent outcome. Using a large panel of countries, covering several decades and various fiscal decentralization and natural resource measures, we provide empirical support for the novel hypothesis. We also study a model that combines political and market mechanisms, under a unified framework, to illustrate how natural resource booms may create negative effects in fiscally decentralized nations.
Keywords: Natural Resources, Economic Growth, Fiscal Decentralization
JEL Classification: O13, O18, O40, Q32, H77
Suggested Citation: Suggested Citation
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