Is there really a resource curse? a critical survey of theory and evidence

Global Governance

Volumn 17, Issue 2, 2011, Pages 167-184

  di John, Jonathan ^a  

^a UNIVERSITY OF LONDON   (United Kingdom)

Author keywords

Economic performance; Rent seeking models; Rentier state; Resource abundance; Resource curse

Indexed keywords

EID: 79959488151     PISSN: 10752846     EISSN: 19426720     Source Type: Journal    
DOI: 10.1163/19426720-01702005     Document Type: Article

References (70)

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2. Nicholas Kaldor, Strategic Factors in Economic Development (Ithaca: New York State School of Industrial and Labor Relations, Cornell University, 1967).
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4. Harold Innis, The Fur Trade in Canada (New Haven: Yale University Press, 1930)
5. Melville H. Watkins, "A Staple Theory of Growth, " Canadian Journal of Economics and Political Science 29, no. 2 (1963): 141-158. Moreover, other authors find a generally growth-enhancing role of natural resource-rich countries in the period 1870-1914
6. Ronald Findlay and Mats Lundhal, "Resource-led Growth: A Long-term Perspective, " WIDER Working Paper No. 162 (Helsinki: United Nations University; World Institute of Development Economics Research, 1999).
7. Alan Gelb et al., Oil Windfalls: Blessing or Curse? (Oxford: Oxford University Press, 1988), pp. 17-18.
8. Jeffrey Sachs and Andrew Warner find, in the period 1971-1989, that mineral exporters, on average, grew more slowly than the average growth of non-mineral exporters; Jeffrey Sachs and Andrew Warner, "Natural Resource Abundance and Economic Growth, " National Bureau of Economic Research Working Paper No. 5398 (Cambridge, MA: National Bureau of Economic Research, 1995).
9. However, Daniel Lederman and William Maloney, using the Sachs and Warner data, find that there is not robust evidence to suggest that resource abundance negatively affects growth; Daniel Lederman and William Maloney, "Trade Structure and Growth, " in Daniel Lederman and William Maloney, eds., Natural Resources: Neither Curse nor Destiny (Washington, DC: World Bank, 2007), pp. 15-40.
10. Raúl Prebisch, The Economic Development of Latin America and Its Principal Problems (New York: UN, 1950)
11. Celso Furtado, Economic Development in Latin America (Cambridge: Cambridge University Press, 1970)
12. Paul Baran and Paul Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966)
13. Samir Amin, Unequal Development (Brighton, UK: Harvester Press, 1976).
14. Gabriel Palma, "Dependency: A Formal Theory of Underdevelopment or a Methodology for the Analysis of Concrete Situations of Underdevelopment?" World Development 6, no. 7-8 (1978): 881-924.
15. John Weeks, Limits to Capitalist Development: The Industrialization of Peru 1950-1980 (Boulder: Westview Press, 1985).
16. See Stephen Haber, "Introduction, " in Stephen Haber, ed., How Latin America Fell Behind: Essays in the Economic History of Brazil and Mexico, 1800-1914 (Stanford: Stanford University Press, 1997), pp. 1-33.
17. John Maynard Keynes, A Treatise on Money, vol. 2 (London: Macmillan, 1930).
18. Michael Ross, "What Do We Know About Natural Resources and Civil War?" Journal of Peace Research 41, no. 3 (2004): 337-356
19. Jonathan Di John, "Oil Abundance and Violent Political Conflict: A Critical Assessment, " Journal of Development Studies 43, no. 6 (2007): 961-986.
20. For a discussion of the conditions under which mineral and fuel wealth affects regime type, see Thad Dunning, Crude Democracy: Natural Resource Wealth and Political Regimes (Cambridge: Cambridge University Press, 2008).
21. "Dutch disease" models are summarized in Peter Neary and Sweder van Wijnbergen, Natural Resources and the Macro Economy (Cambridge: MIT Press, 1986).
22. Raúl Prebisch, The Economic Development of Latin America and Its Principal Problems (New York: UN, 1950).
23. Allyn A. Young, "Increasing Returns and Economic Progress, " Economic Journal 38, no. 152 (1928): 527-542.
24. Sukti Dasgupta and A. Singh, "Manufacturing, Services, and Premature Deindustrialization: A Kaldorian Analysis, " World Institute for Development Economics Research Paper No. 2006/49 (Helsinki: World Institute for Development Economics Research, 2006).
25. Neary and van Wijnbergen, Natural Resources and the Macro Economy, pp. 10-11.
26. See Jonathan Di John, From Windfall to Curse? Oil and Industrialization in Venezuela, 1920 to the Present (University Park: Penn State University Press, 2009), pp. 35-76.
27. Hossein Mahdavy, "The Patterns and Problems of Economic Development in Rentier States, " in M. A. Cook, ed., Studies in the Economic History of the Middle East (London: Oxford University Press, 1970), pp. 428-468
28. Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro States (Berkeley: University of California Press, 1997)
29. Richard Auty, "Patterns of Rent-extraction and Deployment in Developing Countries: Implications for Governance, Economic Policy and Performance, " in George Mavrotas and Anthony F. Shorrocks, eds., Advancing Development: Core Themes in Global Economics (Basingstoke: Palgrave, 2007), pp. 555-577.
30. Stanley Engerman and Kenneth Sokoloff, "Factor Endowments, Institutions and Differential Paths to Growth Among New World Economies: A View from Economic Historians in the United States, " in Stephen Haber, ed., How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico, 1800-1914 (Stanford: Stanford University Press, 1997), pp. 260-306.
31. Paul Milgrom and John Roberts, "Bargaining Costs, Influence Costs, and the Organization of Economic Activity, " in James Alt and Kenneth Shepsle, eds., Perspectives on Positive Political Economy (Cambridge: Cambridge University Press, 1990), p. 269.
32. Paolo Mauro, "Corruption: Causes, Consequences, and Agenda for Further Research, " Finance and Development 35, no. 1 (1998): 11-14.
33. Dennis Mueller, Public Choice II (Cambridge: Cambridge University Press, 1989), p. 241.
34. Aaron Tornell and Philip Lane, "The Voracity Effect, " American Economic Review 89, no. 1 (1999): 22-46.
35. Aaron Tornell and Philip Lane, "The Voracity Effect, " American Economic Review 89, no. 1 (1999): 38-40.
36. Aaron Tornell and Philip Lane, "The Voracity Effect, " American Economic Review 89, no. 1 (1999): 40.
37. On Venezuela, see Maria Moreno and Francisco Rodríguez, "Plenty of Room? Fiscal Space in a Resource Abundant Economy, " paper presented at UN Development Programme conference, "Pro-poor Domestic Resource Mobilization: Securing Fiscal Space, " Dakar, Senegal, November 2005.
38. Di John, From Windfall to Curse? pp. 90-91.
39. Di John, From Windfall to Curse? pp. 90-91.
40. Terry Lynn Karl, The Paradox of Plenty, 42.
41. Terry Lynn Karl, The Paradox of Plenty, 40-43.
42. The key term here is "in production terms. " With hindsight, we know that Venezuela had large oil reserves. However, no one knew about them in the nineteenth century nor was there any technological capacity in the country to discover, let alone develop, the vast oil and natural gas reserves that existed.
43. Terry Lynn Karl, The Paradox of Plenty, p. 13.
44. Robert Louis Gilmore, Caudillism and Militarism in Venezuela 1810-1910 (Athens: Ohio University Press, 1964).
45. Rosemary Thorp, Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century (Washington, DC: Inter-American Development Bank, 1998), p. 353.
46. Di John, From Windfall to Curse? pp. 77-107.
47. Miguel Angel Centeno, "Blood and Debt: War and Taxation in Nineteenthcentury Latin America, " American Journal of Sociology 102, no. 6 (1997): 1565-1605.
48. Elinor Ostrom, Governing the Commons (Cambridge: Cambridge University Press, 1990).
49. Mancur Olson, "Dictatorship, Democracy and Development, " American Political Science Review 87, no. 3 (1993): 567-576.
50. It should be kept in mind that developmental outcomes are not only, or even mainly, the result of a leader's intentions or aims. Developmental outcomes are often the unintended consequences of conflicts and political struggles. Also, the distinction between developmental and predatory is not necessarily in binary opposition. Leaders who do not have developmental aims will not necessarily become predatory.
51. Findlay and Lundhal, "Resource-led Growth. "
52. Christa Brunnschweiler, "Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth, " World Development 36, no. 3 (2008): 401.
53. Gavin Wright and Jesse Czelusta, "Resource-based Growth: Past and Present, " in Daniel Lederman and William Maloney, eds., Natural Resources: Neither Curse nor Destiny (Washington, DC: World Bank, 2007), pp. 183-213.
54. Magnus Blomström and Ari Kokko, "From Natural Resources to High-tech Production: The Evolution of Industrial Competitiveness in Sweden and Finland, " in Daniel Lederman and William Maloney, eds., Natural Resources: Neither Curse nor Destiny (Washington, DC: World Bank, 2007), pp. 213-259.
55. John Weeks, Victoria Chisala, Alemayehu Geda, Hulya Dagdeviren, Terry McKinley, Carlos Oya, and Alfredo Saad-Filho, Economic Policies for Growth, Employment and Poverty Reduction: Case Study of Zambia (London: Centre for Development Policy and Research, School of Oriental and African Studies, University of London, 2004).
56. Alastair Fraser and John Lungu, "For Whom the Windfalls? Winners and Losers in the Privatisation of Zambia's Copper Mines" (Lusaka, Zambia: Civil Society Trade Network of Zambia, 2007), www.minewatchzambia.com/reports/report.pdf (accessed 1 August 2010).
57. Thomas Baunsgaard, "A Primer on Mineral Taxation, " International Monetary Fund Working Paper No. WP/01/139 (Washington, DC: IMF, 2001).
58. Both examples drawn from Paul Collier and Anthony Venables, "Natural Resources and State Fragility, " Oxford Centre for the Analysis of Resource Rich Economies Research Paper No. 31 (Oxford: OxCarre, 2009), pp. 18-19.
59. The potential of improving the bargaining position of governments is enormous. As of 2000, the average square kilometer of the African landmass had beneath it only around $25,000 of known subsoil assets whereas the corresponding figure for the landmass of the Organisation for Economic Co-operation and Development (OECD) is $125,000; Collier and Venables, "Natural Resources and State Fragility, " p. 18. Since the subsoil assets of the OECD have been heavily exploited for a far longer period than those of Africa, it is likely that the true average value of Africa's subsoil assets exceeds that of the OECD.
60. For a discussion of how and why ownership patterns within the oil sector itself affect governance and reform processes in transition economies, see Pauline Jones Luong and Erika Weinthal, Oil Is Not a Curse: Ownership Structure and Institutions in Soviet Successor States (Cambridge: Cambridge University Press, 2010).
61. Ricardo Hausmann and Francisco Rodríguez, "Why Did Venezuelan Growth Collapse?" paper presented at the Kennedy School of Government conference, "Venezuelan Economic Growth 1970-2005, " Harvard University, Cambridge, April 2006.
62. Ricardo Hausmann and Francisco Rodríguez, "Why Did Venezuelan Growth Collapse?" paper presented at the Kennedy School of Government conference, "Venezuelan Economic Growth 1970-2005, " Harvard University, Cambridge, April 2006. p. 10.
63. Ricardo Hausmann and Francisco Rodríguez, "Why Did Venezuelan Growth Collapse?" paper presented at the Kennedy School of Government conference, "Venezuelan Economic Growth 1970-2005, " Harvard University, Cambridge, April 2006. p. 10.
64. Ricardo Hausmann and Francisco Rodríguez, "Why Did Venezuelan Growth Collapse?" paper presented at the Kennedy School of Government conference, "Venezuelan Economic Growth 1970-2005, " Harvard University, Cambridge, April 2006. p. 12.
65. Douglass C. North, John Joseph Wallis, and Barry R. Weingast, Violence and Social Orders (Cambridge: Cambridge University Press, 2009).
66. Richard Auty and Nicola Pontara, "A Dual Track Strategy for Managing Mauritania's Projected Oil Rent, " Development Policy Review 26, no. 1 (2008): 59-77.
67. On Mauritius, see Ronald Findlay and Stanislaw Wellisz, The Political Economy of Poverty, Equity and Growth: Five Small Open Economies (New York: Oxford University Press, 1993).
68. On Malaysia, see Henry J. Bruton, The Political Economy of Poverty, Equity and Growth: Sri Lanka and Malaysia (New York: Oxford University Press, 1992).
69. On China, see Yingyi Qian, "How Reform Worked in China, " in Dani Rodrik, ed., In Search of Prosperity: Analytic Narratives of Economic Growth (Princeton: Princeton University Press, 2003), pp. 297-333.
70. On Indonesia, see Frank Flatters and Glenn Paul Jenkins, Trade Policy in Indonesia (Cambridge: Harvard Institute for International Development, 1986).