Natural Resource Abundance and Economic Growths

1 November 2005

journal article
Published by University of Wisconsin Press in Land Economics

Vol. 81 (4) , 496-502
https://doi.org/10.3368/le.81.4.496

Abstract

This paper explores whether natural resource abundance leads to slower growth rates. We distinguish between natural resource dependence (RD) and natural resource endowment (RE). We estimate two models, using World Bank data on national capital stocks. In a one-equation model we show that RD has a negative effect on growth rates, apparently confirming the main results of the resource “curse” literature. RE, however, has a positive impact on growth. We then estimate a three-equation recursive model, introducing endogenous human capital and allowing for endogeneity also in resource dependence. Here the effects of natural resources on growth are not significant. (JEL O11, Q32)

Keywords

MODEL
GROWTH
EQUATION
CAPITAL
NATURAL RESOURCE
RESOURCE DEPENDENCE
RESOURCE ABUNDANCE
ENDOGENOUS

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