Hostname: page-component-8448b6f56d-c47g7 Total loading time: 0 Render date: 2024-04-23T12:16:57.460Z Has data issue: false hasContentIssue false
  • English
  • Français

Corruption, Development and the Curse of Natural Resources

Published online by Cambridge University Press:  29 June 2011

Shannon M. Pendergast ,
Judith A. Clarke  and
G. Cornelis Van Kooten
Shannon M. Pendergast
Affiliation:
University of Victoria, smramage@uvic.ca
Judith A. Clarke*
Affiliation:
University of Victoria, jaclarke@uvic.ca
G. Cornelis Van Kooten
Affiliation:
University of Victoria, kooten@uvic.ca
*
Judith A Clarke, Department of Economics, University of Victoria, PO Box 1700 STN CSC, Victoria, British Columbia, V8W 2Y2, Canada, jaclarke@uvic.ca
Get access Rights & Permissions [Opens in a new window]

Abstract

Abstract. Sachs and Warner (1995) found a negative relationship between natural resources and economic growth, concluding that natural resources are a curse. This explanation for poor economic growth is now widely accepted. We provide an alternative econometric framework for evaluating the resource curse. We focus on resource rents and rent-seeking behaviour, arguing that rent seeking affects corruption and that, in turn, impacts well-being. Our measure of well-being is the Human Development Index, although we find similar results for per capita GDP. While resource abundance does not directly impact economic development, we find that natural resources are associated with rent seeking that negatively affects well-being, with results robust to various model specifications and sensitivity analyses.

Résumé. Sachs et Warner (1995) ont observé une relation négative entre les ressources naturelles et la croissance économique et ils en ont conclu que les ressources naturelles étaient une malédiction. Cette explication de la faible croissance économique est maintenant largement acceptée. Nous offrons un cadre économétrique pour évaluer différemment cette malédiction des ressources. Nous nous concentrons sur les rentes tirées des ressources et sur la recherche de rente, en faisant valoir que la recherche de rente affecte la corruption, qui à son tour nuit au bien-être. Notre mesure du bien-être est l'indice de développement humain, même si nous trouvons des résultats similaires pour le PIB par habitant. Bien que l'abondance des ressources n'ait pas d'impact direct sur le développement économique, nous constatons que les ressources naturelles sont associées à la recherche de rente qui a une incidence négative sur le bien-être, comme en attestent nos résultats empiriques selon les diverses spécifications du modèle et des analyses de sensibilité.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 44 , Issue 2 , June 2011 , pp. 411 - 437
Copyright
Copyright © Canadian Political Science Association 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ades, A. and Di Tella, R.. 1999. “Rents, competition, and corruption.” American Economic Review 89(4): 982–93.CrossRefGoogle Scholar
Barbier, E.B. 2003. “The role of natural resources in economic development.” Australian Economic Papers 42(2): 253–72.CrossRefGoogle Scholar
Beck, N. 2001. “Time-series cross-section data: What have we learned in the past few years?” Annual Review of Political Science 4: 271–93.Google Scholar
Beck, N. and Katz, J.. 1995. “What to do (and not to do) with time-series cross-section data.” American Political Science Review 89(3): 634–47.CrossRefGoogle Scholar
Brunnschweiler, C.N. and Bulte, E.H.. 2008. “The resource curse revisited and revised: A tale of paradoxes and red herrings.” Journal of Environmental Economics and Management 55(3): 248–64.CrossRefGoogle Scholar
Bulte, E.H., Damania, R. and Deacon, R.T.. 2005. “Resource intensity, institutions, and development.” World Development 33(7): 1029–44.CrossRefGoogle Scholar
Center for Systematic Peace. 2009. “Polity IV Project: Political Regime Characteristics and Transitions, 1800–2007.” Polity IV dataset version 2007.Google Scholar
CIA (Central Intelligence Agency). 2007. The World Factbook. Available from https://www.cia.gov/library/publications/the-world-factbook/index.html. Last accessed 21 March 2011.Google Scholar
Collier, P. and Goderis, B.. 2007. “Commodity prices, growth, and the natural resource curse: reconciling a conundrum.” CSAE WPS/2007-15.Google Scholar
Collier, P. and Hoeffler, A.. 2004. “Greed and grievance in civil war.” Oxford Economic Papers 56(4): 563–96.CrossRefGoogle Scholar
Davidson, R. and MacKinnon, J.G.. 1989. “Testing for consistency using artificial regressions.” Econometric Theory 5(3): 363–84.Google Scholar
de Soto, H. 2000. The Mystery of Capital. Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books.Google Scholar
de Soysa, I. 2002. “Paradise is a bazaar? Greed, creed, and governance in civil war, 1989–99.” Journal of Peace Research 39(4): 395–416.Google Scholar
Fearon, J.D. 2005. “Primary commodity exports and civil war.” Journal of Conflict Resolution 49(4): 483–507.CrossRefGoogle Scholar
Fearon, J.D. and Laitin, D.D.. 2003. “Ethnicity, insurgency, and civil war.” American Political Science Review 97(1): 75–90.Google Scholar
Gray, C.W. and Kaufmann, D.. 1998. “Corruption and development.” International Monetary Fund: Finance & Development 35(1): 7–10.Google Scholar
Gupta, S., Davoodi, H. and Tiongson, E.. 2001. “Corruption and the provision of health care and education services.” In The Political Economy of Corruption, ed. Jain, A.K.. London: Routledge.Google Scholar
Gylfason, T. 2001. “Natural resources and economic growth: What is the connection?” Center for Economic Studies: Ifo Institute for Economic Research. WP no. 530. Munich, Germany.CrossRefGoogle Scholar
Gylfason, T. 2002. “Mother earth: Ally or adversary?” World Economic 3(1): 7–24.Google Scholar
Lewis, W. A. 1954. “Economic development with unlimited supplies of labour.” The Manchester School 28(2): 139–91.Google Scholar
Louis, T.A. and Zegier, S.L.. 2009. “Effective communication of standard errors and confidence intervals.” Biostatistics 10(1): 1–2.CrossRefGoogle ScholarPubMed
Lujala, P., Gleditsch, N.P. and Gilmore, E.. 2005. “A diamond curse? Civil war and a lootable resource.” Journal of Conflict Resolution 49(4): 538–62.CrossRefGoogle Scholar
Macdonald, R. 2007. “Not Dutch Disease, It's China Syndrome.” Statistics Canada Working Paper 11-624-MIE no. 017. http://www.statcan.gc.ca/pub/11-624-m/11-624-m2007017-eng.pdf. Date accessed 21 March 2011.Google Scholar
Manzano, O. and Rigobon, R.. 2001. “Resource curse or debt overhang?” National Bureau of Economic Research. Working Paper no. 8390. Cambridge, MA.Google Scholar
Mauro, P. 1998. “Corruption: Causes, consequences, and agenda for further research.” International Monetary Fund: Finance & Development 35(1): 11–14.Google Scholar
Montinola, G. and Jackman, R.W.. 2002. “Sources of corruption: A cross-country analysis.” British Journal of Political Science 32(1): 147–70.Google Scholar
Murphy, K.M., Shleifer, A. and Vishny, R.W.. 1989. “Industrialization and the big push.” Journal of Political Economy 97(5): 1003–26.CrossRefGoogle Scholar
Naidoo, R. 2004. “Economic growth and liquidation of natural capital: The case of forest clearance.” Land Economics 80(2): 194–208.Google Scholar
Olayele, B.F. 2010. The Resource Curse: A State and Provincial Analysis. REPA Working Paper #2010-001. University of Victoria: Victoria BC.Google Scholar
Papyrakis, E. and Gerlagh, R.. 2004. “The resource curse hypothesis and its transmission channels.” Journal of Comparative Economics 32(1): 181–93.Google Scholar
Plümper, T. 2011. “Fixed effects vector decomposition: Stata ado file.” See http://www.polsci.org/pluemper/ssc.html Last accessed 21 March 2011.CrossRefGoogle Scholar
Plümper, T. and Troeger, V.E.. 2007. “Efficient estimation of time-invariant and rarely changing variables in finite sample panel analyses with unit fixed effects.” Political Analysis 15(2): 124–39.Google Scholar
Plümper, T., Troeger, V.E. and Manow, P.. 2005. “Panel data analysis in comparative politics: linking method to theory.” European Journal of Political Research 44(2): 327–54.Google Scholar
Ross, M.L. 2001. “Does oil hinder democracy?” World Politics 53(3): 325–61.CrossRefGoogle Scholar
Sachs, J.D. and Warner, A.M.. 1995. “Natural resource abundance and economic growth.” National Bureau of Economic Research. Working Paper no. 5398. Cambridge, MA.Google Scholar
Sachs, J.D. and Warner, A.M.. 1997. “Sources of slow growth in African economies.” Journal of African Economies 6(3): 335–76.CrossRefGoogle Scholar
Sachs, J.D. and Warner, A.M.. 2001. “The curse of natural resources.” European Economic Review 45(4-6): 827–38.CrossRefGoogle Scholar
Sala-i-Martin, X., Doppelhofer, G. and Miller, R.. 2003. “Determinants of long-term growth: A Bayesian averaging of classical estimates (BACE) approach.” American Economic Review 94(4): 813–35.CrossRefGoogle Scholar
Sala-i-Martin, X. and Subramanian, A.. 2003. “Addressing the natural resource curse: An illustration from Nigeria.” National Bureau of Economic Research. Working Paper. no. 9804. Cambridge MA.Google Scholar
Tanzi, V. and Davoodi, H.R.. 2001. “Corruption, growth, and public finances.” In The Political Economy of Corruption, ed. Jain, A.K.. London: Routledge.Google Scholar
Theil, H. and Galvez, J.. 1995. “On latitude and affluence: The equatorial Grand Canyon.” Empirical Economics 20(1): 163–66.CrossRefGoogle Scholar
UNCDB (United Nations Common Database). 2007. Available from http://data.un.org. Last accessed 21 March 2011.Google Scholar
UNDP (United Nations Development Programme). 2000, 2002, 2004, & 2006. Human Development Reports, selected years. Available from http://hdr.undp.org/en/reports/ Last accessed 21 March 2011.Google Scholar
van Kooten, G.C. and Folmer, H.. 2004. Land and Forest Economics. Cheltenham UK: Edward Elgar.Google Scholar
Wooldridge, J.M. 2002. Econometric Analysis of Cross Section and Panel Data. London: MIT Press.Google Scholar
World Bank. 2007. World Development Indicators: http://www.worldbank.org/ Date accessed 21 March 2011.Google Scholar