Addressing the Natural Resource Curse: An Illustration from Nigeria

46 Pages Posted: 30 Jun 2003 Last revised: 24 Jun 2013

See all articles by Xavier Sala-i-Martin

Xavier Sala-i-Martin

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Arvind Subramanian

International Monetary Fund (IMF); Center for Global Development

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Date Written: June 2003

Abstract

Some natural resources -- oil and minerals in particular -- exert a negative and nonlinear impact on growth via their deleterious impact on institutional quality. We show this result to be very robust. The Nigerian experience provides telling confirmation of this aspect of natural resources. Waste and corruption from oil rather than Dutch disease has been responsible for its poor long run economic performance. We propose a solution for addressing this resource curse which involves directly distributing the oil revenues to the public. Even with all the difficulties of corruption and inefficiency that will no doubt plague its actual implementation, our proposal will, at the least, be vastly superior to the status quo. At best, however, it could fundamentally improve the quality of public institutions and, as a result, transform economics and politics in Nigeria.

Suggested Citation

Sala-i-Martin, Francesc Xavier and Subramanian, Arvind, Addressing the Natural Resource Curse: An Illustration from Nigeria (June 2003). NBER Working Paper No. w9804. Available at SSRN: https://ssrn.com/abstract=420318

Francesc Xavier Sala-i-Martin (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States
212-854-7055 (Phone)

Arvind Subramanian

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Center for Global Development

2055 L St. NW
5th floor
Washington, DC 20036
United States

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