Institutions and the Resource Curse
2006/01/01 by Halvor Mehlum, Karl Moene, Karl Ove Moene +1 · 2,813 citations
Economics, Econometrics and Finance · Social Sciences · #Culture, Economy, and Development Studies #Curse #Economics #International Development and Aid #Law #Natural Resources and Economic Development #Natural resource #Political science #Public economics #Quality (philosophy) #Resource (disambiguation) #Resource curse #Sociology #Test (biology)
paper · open access · doi:10.1111/j.1468-0297.2006.01045.x
published in The Economic Journal 116(508), 1-20 (Oxford University Press)
openalex publication_date 2006/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
Abstract
Countries rich in natural resources constitute both growth losers and growth winners. We claim that the main reason for these diverging experiences is differences in the quality of institutions. More natural resources push aggregate income down, when institutions are grabber friendly, while more resources raise income, when institutions are producer friendly. We test this theory building on Sachs and Warner’s influential works on the resource curse. Our main hypothesis – that institutions are decisive for the resource curse – is confirmed. Our results contrast the claims of Sachs and Warner that institutions do not play a role.
Citations
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