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Immense oil deposits were discovered in the offshore Guyana Basin in 2015 and Guyana is now on the verge of a monumental economic transformation. Significant financial and societal benefits might be byproducts of Guyana’s oil wealth; however, scholars have well documented that resource blessing can become a resource curse. This thesis examines Guyana’s history leading up to oil discovery, evaluates the post-discovery political events that exhibit mechanisms of the resource curse, and assesses Guyana’s economic progress and policies implemented to understand how these mechanisms affect Guyana and how Guyana is mitigating the harmful effects of the resource curse. This thesis concludes that several mechanisms of the resource curse are contributing to the contentious political environment and negatively affecting economic development and growth. However, Guyana has progressed in politics, including improvements in transparency, implementation of local elections, and adoption of rules to mitigate violence. Guyana also has implemented several economic policies, including establishing a development strategy, a natural resource fund, and a local content policy to reduce the economic effects of the resource curse. These safeguards, among others, are helping Guyana to avoid the resource curse. Lieutenant Commander, United States Navy Approved for public release. Distribution is unlimited.

The academic debate on whether there is a “resource curse” has lasted for nearly three decades. This paper aims to verify the existence of a “resource curse” with the proposed new model, named the generalised weighted least squares support vector panel regression (GWLS-SVPR) model, from the perspective of spatial heterogeneity, in response to the debate of scholars. Our case study focuses on the data of 31 regions in China from 2009 to 2018. The results show that the impact of natural resources on economic growth has spatial correlation and heterogeneity, and different proxy variables have different conclusions. Overall, it is easier to conclude that there is a “resource curse” by using resource dependence as a substitute variable for natural resources than by using resource abundance. Using per capita GDP as the proxy variable of economic growth is easier to get the conclusion that there is no “resource curse” than per capita GDP growth rate. After considering both spatial heterogeneity and proxy variable differences, we conclude that a “resource curse” does exist in some regions of China, but there are obvious spatial differences.

Numerous studies have examined the resource curse using different perspectives. This study investigates how the resource curse occurs in three countries with different institutional structures using a new model. The DIGNARMTFF model introduced and presented in this article is a combination of the DIGNAR model and the FMM-MTFF model. This model includes a consistent framework for industrial production, the inflow of intermediate goods, public investment inefficiencies, learning-by-doing externalities in foreign and intermediate goods sectors, and absorptive capacity constraints. In this research, the Input-Output Table data for Saudi Arabia, Mexico, and Norway in 2015 have been used. A simplified three-sector version of the Input-Output table compares the model’s output for countries. The model is used under a specific scenario with different oil revenue cycles. The results for Saudi Arabia, a country with a specific institutional structure characterized by high dependence on oil revenues, show that the effects of abundant resources on non-resource incomes are severely negative indicating that Saudi Arabia experienced the Dutch disease with more intensity. The Dutch disease was less severe in Norway and Mexico, which have broader tax systems based on different institutional structures. The model’s results show the role of an efficient tax system in overcoming natural resources’ revenue cycles and the independence of the economies from these revenue cycles thus avoiding the resource curse.

This paper provides evidence about the relationship between economic structure and political violence in Latin American countries in the period 1990–2019. The empirical analysis suggests that manufacturing activities are negatively associated with the number of terroristic attacks. On the contrary it exists a positive relationship between mining activities and political violence. A further analysis suggests that the relative size of manufacturing with respect to mining sector is negatively associated to terroristic attacks occurrence. Such relationship becomes stronger when it is associated to high levels of trade openness.

PurposeA reflection on some supposed oil exporting states constantly reminds of the (in) validity of the resource curse hypothesis and environmental consequences of oil exploration. In Africa, especially the case of Nigeria, the argument has remained whether the country's voluminous deposit of crude oil has positively affected the livelihood of the people. The study aims to examine the impact of oil production on the income level in Nigeria.Design/methodology/approachIn this context, the study first examined validity of Dutch disease in Nigeria, thus providing a foundation to further establish the resource curse hypothesis. As such, the impact of crude oil production (CRUDE), square of crude oil production (CRUDESQ), crude oil reserves (RESERVES) and population (POP) on economic growth over the period of 1980–2018 is examined through the combination of autoregressive distributed lag (ARDL), fully-modified ordinary least square (FMOLS) and canonical cointegration regression (CCR) methods.FindingsWhile the study revealed the existence of Dutch disease in Nigeria, the resource curse hypothesis is also valid. However, the study found that the resource curse hypothesis in Nigeria can be over-turned when the CRUDE attains a certain maximum threshold, i.e. when crude oil output is doubled over time. In addition, either of crude RESERVES or oil rent (RENT) is seen as a limiting factor to economic growth while POP poses a positive and desirable impact on the country's economic development.Originality/valueThus, the implication of a U-shaped relationship between oil production and income level is that Nigeria's natural resources exploration could be employed to over-turn the potential of resource curse hypothesis by increasing exploration while the sources of leakages and misappropriation of the oil revenues are deliberately mitigated. Other useful socio-economic policies were proposed for the Government.

Non-renewable energy resources are considered to be an important input for industries that support local industrial production and employment. However, many researchers believe that such resources have a damaging effect on the institutional quality, because this quality has an effect on a country’s decision-making mechanisms, and on the human capital, which is usually described as the accumulation of education in a specified population. This collective damage thus impedes economic growth and development. The present study analyses the impact of resource rents from non-renewable energy resources and the human capital on the institutional quality in Kuwait, using an autoregressive distributed lag (ARDL) approach based on data for the period between 1984 to 2018. The results indicate that an increase in rents from non-renewable energy resources has decreased institutional quality, whereas human capital enhances the institutional quality both in the short and long-term. This study concludes that an investment in the human capital could help insulate Kuwait from the damaging effects of over-reliance on the non-renewable energy resource rents.Keywords: Non-renewable Energy Resources; Resource Rents; Institutional Quality; Human Capital; Kuwait; Resource CurseJEL Classifications: F62; O11; O38; O40DOI: https://doi.org/10.32479/ijeep.11370

A climate-positive COVID-19 recovery can accelerate the energy transition away from fossil fuels. Yet, current assessments of recovery stimulus programs suggest that the most fossil fuel producers ...

Progress in child mortality reduction and education attainment varies widely among oil-rich countries. We investigate the sources of this variation for 14 oil-rich countries and find five main factors: public spending on health and education, economic growth, caloric sufficiency, initial levels of child mortality and education attainment, and population density. We find that conditional convergence explains much of the cross-country variation in the rate of decline in child mortality and the rate of increase in school enrollment. As for policy factors, the level of caloric sufficiency makes a difference, whereas the contribution of public spending is not as important.

This paper investigates the impact of economic sectors’ foreign direct investment (FDI) on economic growth by validating the resource curse hypothesis in the Gulf Cooperation Council (GCC) countries. Applying OLS (Fixed and Random effects), Instrumental Variables (IV) and Limited Information Maximum Likelihood (LIML) estimations, empirical results indicate that resource-FDI inflows hinder economic growth in the GCC economies, while non-resource FDI has an insignificant effect on growth. Moreover, the total Greenfield FDI inflows deter economic growth in GCC economies. These results give evidence on the crowding-out effect of resource-FDI. This paper opens new insights for policymakers in designing a comprehensive policy on direct FDI inflows (resource and non-resource) to stimulate growth for attaining sustainable economic development for the longrun.

The literature on the natural resource curse is well known – countries with abundant natural resources fail to transform that advantage into favourable development outcomes (see Badeeb, Lean, and C...

PurposeThis paper aims to examine the role of economic integration and natural resources and foreign direct investment (FDI) complementarity in explaining economic growth in the Southern African Development Community (SADC).Design/methodology/approachThe study employed the ordinary least square-random effects and the generalized two-stage least square instrumental variables (IV) regression to examine the relationship between the variables.FindingsThe authors find that regional economic integration and natural resource abundance are essential for promoting economic growth. The results further show a potential resource curse phenomenon, offset by the complementary effect of FDI in resource-rich countries. The findings are robust after conditioning for different measures of institutional quality.Practical implicationsThe findings suggest the need for deeper regional trade integration and international cooperation, prudent natural resource management and concerted effort toward economic diversification.Originality/valueMany studies have examined the determinants of economic growth in the Southern African Development Community (SADC). However, these studies did not incorporate or assess the potential of economic integration in the region. Moreover, studies that examined the growth effects of FDI did not assess the complementary role of the region's natural resource endowment which potentially drives FDI inflows. This study fills these gaps and provides a robust analysis of economic growth drivers in the region.

The resource curse literature shows that natural resources, particularly oil, help regime or leadership survival, but it also suggests that resource-rich countries are prone to civil wars or political instability. This article argues that the ownership structure of the oil sector matters and influences leadership survival. Specifically, foreign ownership of the oil sector raises leaders’ survival prospect and leads to more military interventions aimed to help the leader. Using data on oil ownership and leaders from 1962 to 2006 across 120 developing countries, this article finds that foreign involvement in the oil sector has a negative effect on leadership turnover. Countries with deeper foreign involvement in the oil sector are also more likely to experience military interventions on the side of the leaders. In other words, leaders of oil-producing countries do receive political support when they cooperate with and serve as ‘petro-friends’ to foreign powers.

The novel coronavirus disease-2019 (COVID-19) is a deadly disease that increases global healthcare sufferings. Further, it affects the financial and natural resource market simultaneously, as both are considered complementary goods. The volatility in the oil prices deteriorates the global financial market to substantiate the "financial resource (oil) curse" hypothesis primarily filled with earlier studies. In contrast, this study moved forward and extended the given relationship during the COVID-19 pandemic in a panel of 81 different countries. The study's main objective is to examine the volatility in the domestic credit provided to the private sector due to oil shocks and the COVID-19 pandemic across countries. The study is essential to assess the healthcare vulnerability in the COVID-19 pandemic, leading to the damage of financial stability, causing deterioration in the oil rents to affect the global sustainability agenda. The study employed statistical techniques to get sound inferences of the parameter estimates, including robust least squares regression, seemingly unrelated regression, and innovation accounting matrix to get a variable estimate at the level and inter-temporal framework. The results confirmed the U-shaped relationship between oil rents and financial development during the COVID-19 pandemic. Thus, it verifies the "financial resource (oil) curse" hypothesis at the initial stage of the COVID-19 pandemic. Later down, it supports the capital market when economies are resuming their economic activities and maintaining the SOPs to restrain coronavirus at a global scale. The qualitative assessment confirmed the negative effect of financial development and oil shocks on environmental quality during the pandemic crisis. The innovation accounting matrix shows that the COVID-19 pandemic will primarily be the main factor that intervenes in the relationship between oil rents and financial development, which proceed towards the "resource curse" hypothesis during the following years' time period. Therefore, the need for long-term economic policies is highly desirable to support the financial and resource market under the suggested guidelines of restraining coronavirus worldwide.

The ‘resource curse’ associated with natural resource abundance has long been a subject of study across multiple disciplines. Though much research has focused on possible effects of resource wealth on the formal economy, little is known about how such wealth affects the informal sector, a substantial portion of global economic activity. We posit that resource windfalls directly contribute to growth in the informal economy, as investment and spending patterns associated with such revenues limit opportunities within the formal sector and thus channel more labor and businesses into the informal sector. We test these claims across a panel of over 120 countries for the period 1985 to 2012. Across multiple model specifications, we find that resource wealth growth is associated with increased informal economic activity.

The conflict in the Niger Delta region (Nigeria) has become one of the most environmentally and humanly devastating contexts on the African continent since the 1960s. The network of different actors involved in this context forms a complex web in which multiple and asymmetrical dynamics and interactions can be identified. From Jason Moore’s World-Ecology perspective (2015), the article suggests that this complex interaction should not be understood as a mere postcolonial episode in the context of globalisation, but as a historical network of relations. This network, in which human and extra-human natures are intertwined, is key to understanding the process of capital accumulation in the region and the resulting capitalogenic violence since the 16th century. Against this background, the article also attempts to counter the tendency to interpret violence and social resistance in the Niger Delta region as mere criminal phenomena or from narratives such as the “resource curse” that has simplified the multidimensionality of violence. In this sense, the paper analyses the different forms, strategies and meanings through which local resistance movements have tried to safeguard and re-appropriate their livelihoods and the commons in recent decades in the face of the growing presence of multinational oil corporations.

Purpose This study aims to explore the institutional complexities associated with the design and implementation of a natural resource fund for innovation. Design/methodology/approach This study examines the case of Chile's Innovation Fund for Competitiveness by means of a historical approach building on interviews with key informants. Findings The proper functioning of a natural resource fund for innovation requires efficient institutional and operational structures, as well as strong coordination with innovation system actors. In particular, the case of Chile highlights the challenges inherent in adopting a regional approach when implementing this type of strategy, due to the institutional voids that hamper the role of regional governments in emerging countries. Originality/value Natural resource funds for innovation constitute a strategic mechanism for developing the innovative capabilities necessary to enhance the competitiveness of resource-rich emerging countries. This is one of the first studies addressing the institutional challenges involved in setting up this kind of fund in practice, focusing on one of the most relevant and longstanding examples from Latin America.

In the last decade resource curse scholars have argued widely that oil-rich countries are more likely to initiate armed disputes with their neighbors. In this essay, we argue that the evidence poin...

When and for what reason do governments choose to monopolize violence and consolidate power? Theory suggests three channels: when the government has coercive power against the opposition, if it shifts the distribution of power in its favor, and when contingent spoils are large. Using international oil price shocks and a novel dataset on oil-producing local government areas, this article examines how commodity prices affect civil conflict in Nigeria. Results show that a rise in oil price leads to a more than proportionate increase in government attacks on rebel groups in the oil region. The findings are consistent with the theoretical predictions: positive oil price shocks increase the monopoly of violence by the government through an increase in coercion, a rise in regaining territories from rebel groups, and an increase of violence in areas with large oil fields.

Following a rise in the price of oil in the 1970s, a number of developing countries received a significant boost in foreign transfers as oil producers could not absorb all of their new rents domestically. When those transfers ended, some recipients of these transfers eventually democratized as part of the ”Third Wave” while others languished as violent autocracies. This raises a puzzle: how can declines in external transfers foster democratization in some cases, but heighten political violence in others? We develop a formal model to reconcile this tension and demonstrate that autocratic incumbents can become more repressive with higher levels of transfers and either experience civil conflict or democratize at lower levels of transfers. We characterize these dynamics as a ”political transfer problem” and then use case studies and econometric evidence to argue that the largest windfall of the 20th century, the period from 1973–85 during which oil prices were at all-time highs, and its aftermath, produced political dynamics consistent with our model.

The emergence of the crime of oil theft and illegal refineries is not sudden but the realization of its negative economic impact on the national economy and the business of multinational oil companies have taken the State and the companies by storm shortly after the Presidential proclamation of amnesty in 2009 was configured to fob-off militancy in the Niger Delta of Nigeria. This paper attempts to address the resource curse of oil theft and illegal refineries in the region from a legal theoretical framework running through the various socio-legal theories through which the crime can be viewed and explained. It panders to the critical theoretical school which attributes the causes mainly to State and multinational oil company failures in infrastructural development and social responsibility commitments to the indigenous minority ethnic communities of the Niger Delta region of Nigeria rather than the orthodox school which blames the militants for ‘greed not grievance’ instincts. It employs the analytical, historical and doctrinal methods in presenting and analyzing its research data and in drawing its conclusions. The paper finds that two major and mutually repugnant tendencies in the explanation of the crime crop up from the research records. The one pursued by State actors which is anti-recognition and vehemently opposed to oil theft and local refineries and which calls for their bombardments and annihilation through the instrumentality of military strike force, JTF, and the other which is purveyed by non-State actors which is pro-oil theft that believes that the best approach ought to be condonation, legal regulation and mainstreaming of the phenomenon as part of an indigenous building block of development. This latter perspective discountenances the employment of brute force in the confrontation of the phenomenon and is thus recommended in this paper.

This paper examines the impact of oil resources endowment, measured by proven reserves and oil rents, on the economic growth in the presence of quality of governance factors. To address this issue,...

Resource curse mineral driven conflicts have taken a major toll in the African continent. Observably, most of the studies which have been conducted do not address major aspects such as the internat...

Peru is the second-largest producer and exporter of copper in the world. This paper proposes a novel approach to assess short-run and long-run effects of copper on Peru’s recent economic growth. Annual data over the 2014–2018 period were used to calculate a Mining Contribution Index (MCI). An institutional quality indicator of the World Competitiveness Index of the World Economic Forum measured the dependence of Peruvian economic growth on mining and the quality of its institutions, respectively. Then, monthly data during the period 2005–2018 were used to run vector autoregressive (VAR) and vector error correction (VEC) models to measure copper’s effects on the country’s economy over time. VAR-VEC models included copper production, exports, international price, investment, taxes paid by producing companies, and Peru’s gross domestic product (GDP). Stationarity and causality of variables were verified with the Augmented Dickey-Fuller and Granger tests, respectively. Due to the presence of non-stationary variables, a VEC model was implemented to forecast short- and long-run effects. The main results show that real GDP responds to copper output and other related explanatory variables differently, depending upon the instrument applied. Peruvian GDP has increased dependence on copper mining. The quality of its institutions could explain the presence of Dutch Disease or resource curse theory. Short- and long-run effects of copper output on GDP were generally statistically non-significant. GDP was statistically significant in relation to other mining variables, such as copper exports and the international price of copper.

This study investigated the role of government and IOCs in the exploration and management of Ghana’s non-renewable resources (oil/gas) for inclusive development and the prevention of the resource curse. Incorporating the rentier state theory and resource curse theory into the study, this paper found that following the commencement of oil production in 2010, the Government of Ghana has enacted major institutional and legislative frameworks, including the PRMA and the GLCL, to combat the impending challenges of the oil industry. Through the PRMA 815, the Petroleum Holding Fund and PIAC have been established for a more transparent and accountable disbursement of petroleum revenues to various other Funds. Through collaborative efforts between government and IOCs, strategic capacity development programmes and technical training initiatives have been developed to meet Ghana’s rather ambitious local content targets. However, despite these initiatives, the study found that local content implementation and petroleum revenue management have faced challenges, including high prequalification requirements, politicization of local content implementation, low technical capacity of Ghanaian employees, poor offshore labour practices, and the restriction of powers of petroleum revenue oversight institutions. Generally, oil production has engendered several important infrastructural development projects. However, there is a general discontent and dissatisfaction among local oil-producing communities in the Western Region with oil production due to discrepancies between local needs and IOC and Government socio-economic provisions. As such, this paper recommends the proper definition of the “local” in local content, the empowerment of petroleum revenue oversight institutions, organized regulations by the Petroleum Commission, and more collaborative efforts between government, IOCs, and other important stakeholders to eliminate the varied entry barriers of Ghanaians into the oil and gas industry.

With continued expansions of scale, the Chinese cities are facing unprecedented economic, environmental, and energy sustainability challenges. The aim of this paper is to examine the heterogeneous impact of environmental regulation (ER) on urban green scale economy (GSEC), by combining the global Malmquist index approach, spatial econometric model, panel quantile regression model (QRPD), and the city-level panel data from 2004 to 2018. The estimation results show that (1) from 2004 to 2018, the growth rate of GSEC fluctuates sharply, and the values of GSEC are less than 1 in many years. This indicates that GSEC is far from efficient and needs to be improved in the future; (2) the results of the spatial econometric model show that GSEC has a U-shaped relationship with the level of ER. Furthermore, the estimation results of QRPD verify the above conclusions and show that there is distinct heterogeneity of ER on GSEC at different quantiles and regional cities; (3) the results further indicate that other vital control variables have a significant and heterogeneous effect on GSEC. Therefore, the focus of future work should be adapted to local conditions. Specifically, in the cities with lower-level GSEC, the policymakers should give top priority to break through the U-shaped inflection point as soon as possible and help enterprises to achieve pollution reduction by technical and financial subsidies. While in the cities with higher-level GSEC, the government should further strengthen its ER and encourage competition among enterprises by internal technological innovation. In addition, the government should try to avoid the negative effect of the "resource curse" trap, excessive financial leverage, and "race-to-the-bottom" phenomenon.

Previous research has found that regional resource dependence in Indonesia has been positively associated with income growth, contrary to a ‘resource curse’. We test five potential causal mechanisms for this positive effect: spillovers to manufacturing or to agriculture, higher education provision, improved institutional quality and share of public spending on capital. We follow 390 Indonesian districts from 2006 to 2015, using four alternative resource dependence measures, and instrumenting for their potential endogeneity. We first confirm a positive overall effect of resource dependence on real per capita Gross Regional Domestic Product (GRDP), then test whether district resource dependence positively affects manufacturing, agriculture, education, public capital investment and institutional quality. We finally test whether these factors contribute to GRDP while reducing the remaining effect of resource dependence. We find that resource dependence may aid income in part by raising district institutional quality, which in turn raises GRDP. We also find little support for a ‘contingent curse’ hypothesis that resource dependence only benefits districts that already have higher institutional quality.

Studies have shown that the paradox of “the more resource-rich the poorer” otherwise known as “resource curse” has been prevalent in many countries endowed with natural resources. To mitigate this trend, a revenue management strategy called Natural Resource Funds (NRFs) - a government owned special-purpose vehicle to ensure effective management of the country’s natural wealth was embraced in some nations. This paper critically reviewed the roles of NRFs in breaking the resource curse. The Systematic Quantitative Assessment Technique (SQAT) was adopted in identifying and reviewing sixty-seven (67) peer reviewed journal articles that had researched on NRFs in the last decade. The findings were that NRFs have played an effective role in some advanced countries (Chile and China), while they have failed, especially in Africa, Middle East and Latin America due to poor institutional framework and governance. A globally set code of resource governance was recommended to strengthen the role of NRFs and enhance their effectiveness. Resource revenue maximization other than revenue utilization would be a good area for future research.

This study analyses the impact of natural resource rent on financial development to test the resource curse hypothesis in Saudi Arabia on quarterly data span from 1985Q1 to 2017Q4. We employ two novel methodologies at same time such as nonlinear autoregressive model (NARDL) and Wavelet-based quantile-on-quantile estimation to check the asymmetric behaviour of natural resource rent on financial development. The findings of NARDL confirm the nonlinear behaviour of natural resource rent with financial development. The results also show real GDP, gross capital formation and institutional quality affect financial development positively. The empirical results of Wavelet-based quantile-on-quantile estimation method also reveal the heterogeneous response of natural resource rent effect when decomposes into different quantiles that become positive to negative. The results further explain that the natural resource rent has a positive effect in short-run, but it exerts an adverse effect on financial development after attaining stability.

The housing booms and busts in Ireland and Spain were among the most striking episodes of the Eurozone crisis. While asset price inflation and financialization of housing was gathering pace across the developed world, these two ‘most different’ cases converged on the same outcome as the most extreme forms of construction-based bubbles. The key contributions of this paper are threefold. Firstly, we show how cheap credit can be understood as analogous to a natural resource such as oil: resource abundance generates a ‘paradox of plenty’ whereby an asset becomes a liability. Secondly, we open the black box of political pathways through which this happens, expanding our understanding of how perverse outcomes are produced. Thirdly, we account for why Spain and Ireland were more susceptible to extreme outcomes than other European countries, thereby extending our understanding of asymmetries in the political economy of the Eurozone.

Based on the ‘resource curse’ theory, this study uses panel data for 256 prefecture‐level cities in China from 2003 to 2016 to test the relationship and mechanism between natural resource dependence and economic development. The panel model and instrumental variable regression results show that natural resources generally promote economic development, but for 109 resource‐based cities, the influence of natural resources on economic development seems quite different. The panel threshold model shows that in the resource‐based cities, (i) resources have a ‘blessing effect’ on economic development during economic prosperity (GDP growth rate is greater than 12.1 per cent); (ii) the relationship is not statistically significant when the GDP growth rate is between 5 per cent and 12.1 per cent; and (iii) when the GDP growth rate is lower than 5 per cent, natural resources have a ‘curse effect’ on economic development. Furthermore, the results of the mediation effect model show that the mediation effect of industrial diversification on the relationship between resource dependence and economic development suppresses the promotion of natural resource on economy. An excessive concentration of resource industries has a crowding‐out effect on non‐resource industries in resource‐based cities, which reduces the level of industrial diversification and is not conducive to economic development.

In this paper we examine the impact of natural resource wealth by focusing on historical coal-mining across European regions. As an exogenous source of variation in coal extraction activities, we rely on the presence of coal-deposits located on the earth’s surface, which historically facilitated the discovery and extraction of coal. Our results show that former coal-mining regions are substantially poorer, with (at least) 10% smaller per-capita GDP than comparable regions in the same country that did not mine coal. We provide evidence that much of this lag is explained by lower levels of human capital accumulation and that this human-capital effect is concentrated in men. Finally, we provide suggestive evidence that the persistently lower levels of human capital in coal mining regions that we document result from the crystallization of negative attitudes towards education and lower future orientations in these regions.

Corruption is considered an important driver of the resource curse in developing countries. Based on a large-scale field experiment in Tanzania, this paper studies how the salience of future natural resource revenues shapes beliefs, attitudes, and behavior. We find some evidence that information about the discovery of natural gas causes people to expect more corruption in the future, but no evidence of the information making people at present more willing to engage in corruption and dishonest behavior or less trusting. The findings do not support the idea of self-fulfilling expectations about future corruption. The paper provides a rich set of results on the determinants of corruption and trust in a development context, which may contribute to a better understanding of the micro-foundations of the resource curse.

Government behavior can be affected by natural resource benefits. Benevolent government and political leaders may use them to improve the welfare of the people, whereas others may use them for their own interests. To examine the effects of oil bonanza on government behavior comprehensively, this study investigates how giant oilfield discoveries affect the size and composition of government expenditure using data from 168 countries between 1972 and 2008. We find weak evidence that giant oilfield discoveries increase total government expenditure significantly in the medium and long term, whereas their effects are more evident in the short term, especially when controlling for other factors affecting total government expenditure. We also obtain evidence that democracy plays a mediating role in these effects; if the democracy level in a country is consolidated, the size of total government spending does not increase even when discovering giant oilfields. Considering each category of government expenditure, giant oilfield discoveries increase expenditure on health and social protection significantly, whereas they decrease educational expenditure. Furthermore, giant oilfield discoveries decrease expenditure on economic affairs and defense and increase general public services and public order and safety. Finally, giant oilfield discoveries increase the net implicit gasoline subsidy in the long term. These findings enhance our understanding of the effects of oil bonanza on government behavior.

In efforts to explain the resource curse, researchers have examined the connection between the resource curse and national corruption. Because being relatively rich in natural resources may encoura...

The objective of this study is to analyze the effects of oil rent on economic development in Congo over a period from 1987 to 2016. Following the estimation of the Vector Error Correction Model (VECM), the result shows that the dependence on oil rent negatively affects the development of Congo. The poor performance of growth and development in the Congo is mainly linked to the deterioration of governance and the generalization of corruption. This result allows us to formulate an economic policy implication that focuses on the sustainable management of oil resources with future generations in mind and by investing in the diversification of the country’s economic activities. This would help eradicate poverty and improve the standard of living of the population.

The article provides a comparative analysis of Ukraine, Belarus and Kazakhstan to find out how the country's wealth in natural resources affects the features of its innovative development. The study confirmed the inverse relationship between the level of a country's resource endowment and the rate of its innovative development: the richer a country is in natural resources, the lower the level of innovation development in it. This trend, which is called the "resource curse", has manifested itself to the greatest extent in Kazakhstan through a significant dependence on oil exports, as well as in Ukraine due to dependence on the export of grain crops. The main factors affecting the characteristics of the country's economic development in such conditions are the level of human capital, which manifests itself through formal education, formed skills, as well as the perfection of the institutional environment, which should create incentives for the development of high-tech manufacturing industries. Overcoming the negative effects of the “resource curse” requires the will and systemic organizational efforts of the state to redirect resource rent to the development of modern industries, as well as assistance in their entry into foreign markets. But the problem here is the lack of interest of the state in improving the institutional environment in the presence of high natural resource rent, that is, there is a relationship between the availability of resource rent and imperfect institutions. The development of the ICT sector can be considered a positive trend in Ukraine, which could potentially prevent a sharp decline in the level of human capital development.

Russian Federation and Canada are the largest arctic powers that have similar features in evolving their Arctic zones. In the mid-1920s both countries formalized their rights to the northern territories. Russian and Canadian arctic regions are located in harsh climatic zones,geographically distant from national political and business centers, poorly populated, and rich in natural resources. At the same time, there are obvious differences in political institutions,“core-periphery” relationships, business organization, and social activities of aboriginal people and newcomers. The purpose of this study is a comparative evaluation how the rich resource base and industrial production impact on the socio-economic development of the Arctic regions of Russia and Canada. To reach the goal authors use the official statistical sources of the Russian Federation and Canada. Case study method, comparative analysis, and econometric calculations are applied. As a result similar and distinctive features of the industrial development of the Arctic regions of these countries were identified. It can be explained, first of all, by the institutional characteristics of Russia and Canada. Comparing an evidence of the leading extractive companies completed the empirical analysis. Authors concluded that the regions under consideration are characterized by a high or medium share of the extractive industry in the regional economy. Specialization in natural resources extraction and primary processing does not have a negative impact on the economic development of the territories. However, outer companies are engaged in this business that increases the dependence of the regional economy on the conjuncture of world markets. The article investigates in empirical studying common features of the extractive industry in the peripheral Russian and Canadian Arctic territories and its impact on the socio-economic development of these regions.

This study investigated “Entrepreneurship and Economic Diversification in Nigeria: The Moderating influence of Enabling Environment on Global Satellite Mobile Village’s Experience.” The purpose was to find out the relationship between entrepreneurship and economic diversification with focus on the moderating influence of enabling environment. A cross-sectional survey design and convenience sampling technique were adopted. Pilot survey and confirmatory factor analysis were carried out to validate the research instrument. The reliability test of the instrument yielded a value of 0.67 which more than met Bagozzi and Yi’s benchmark of α ≥ 0.50 and as such, was accepted as adequate and used. Primary data were obtained from 127 copies of questionnaire issued out of which 120 copies representing 94% return rate were retrieved and used in the study. Pearson’s Product Moment Correlation Coefficient was used to analyse the data aided by Statistical Package for Social Sciences (SPSS) version 25.0. The findings showed that there was no significant relationship between entrepreneurship and economic diversification. However, the enabling environment had significant moderating influence on the relationships between entrepreneurship and economic diversification. These findings informed the conclusion that enabling environment moderates the relationship between entrepreneurship and economic diversification. It is recommended that further empirical study be carried out in other segments of the economy with more factors to corroborate or diverge from these outcomes. Moreover, government should create cultural awareness, deploy resources to diversify the economy via entrepreneurship and free itself from the Dutch disease of resource curse theory.

Research suggests dependence on natural resource development leads to decreases in per capita income, increases in inequality, and elevated poverty. Natural resource development generally takes two forms—extractive (e.g., oil and gas, mining, timber) and nonextractive (e.g., tourism, recreation, real estate). However, research has rarely examined both in tandem. Drawing on the concept of dependence (i.e., overspecialization), the author tests the hypothesis that increasing levels of both forms of development were associated with diminishing returns to economic prosperity—operationalized as per capita income, inequality, and poverty—in rural America over the period of 2000 to 2015. Extractive development exhibited the expected relationship in remote rural counties for all outcomes, while nonextractive development had a generally negative relationship with per capita income, a positive relationship with poverty, and no relationship with inequality. Support for the overall hypothesis was limited due to the returns of nonextractive development being more negative than expected.

Scholars develop two different thoughts of natural resource wealth and its relations to political stability, namely - the resource curse and the rentier state. In the rentier state discourse, the revenue from resource extraction is used to buy off peace through several methods, such as patronage, repression, external support and large-scale distributive policy. The rentier economy concept becomes an important subject to explain oil economies in oil-rich countries across the world, especially in the Middle East region. This paper explores the rentier practice outside the Middle East by focusing on Southeast Asia. It uses a single case study - Indonesia under Suharto during the oil boom period. Two main questions are addressed by this paper - what kind of rentier state practice can be found from the authoritarian government especially during the oil boom period, and how the local/regional newspapers report on and react to the government rentier state practices? The paper relies on nine local, and three national newspapers as its primary data, supported by secondary sources to answer those questions. The finding shows that the national and local newspapers wrote different reports on rentier practices and all newspapers adopted three different positions on rentier practices - pro-government, critical to government, and neutral position.

Purpose: The abundance of natural resources is usually considered the blessing for the countries that own such resources. However, such wealth is often associated with poverty and a slower economic growth. This phenomenon is called the resource curse, and it shows that most countries that are rich in natural resources have markedly reduced economic growth and development, and it shows that the wealth of natural resources adversely affects their economies, although it is intuitively expected to be the opposite i.e. that such wealth would have a positive impact on the country’s economic development. The general objective of the study was to find out the motivational effect of oil exploration in Somali and the habitual African resource curse. Methodology: The paper used a desk study review methodology where relevant empirical literature was reviewed to identify main themes and to extract knowledge gaps. Findings: The study found out that Oil resource exploration has led to progress in some developed economies such as Canada which was able to avoid the resource curse. This is because oil revenues helped Canada among other countries make investments in capital, build employment and grow. Other countries such as Russia and Japan have not been able to avoid the resource curse. African countries in general where the majority of oil producing nations are, have an inverse correlation between oil production and industrial development. Examples of African countries that have been affected by the resource curse are Nigeria, Angola, South Africa and Zimbabwe. Empirical results indicate that, Somalia motivation for oil exploration is for economic development. However, it has not been spared the resource curse because the presence of oil has led to civil wars and terrorisms as groups seek to control the areas with oil fields. In addition, Somali and Kenya have involved diplomatic warfare over oil reserves that are located in the Indian Ocean near their borders. Recommendations: The study recommends that the government should enact laws which will govern petroleum operations, as well as empowering the Somali Petroleum Authority,(SPA) which will act as a regulatory body overseeing oil and gas activity.

While most of the literature on natural resources highlights their effect on the growth rate and level of income, this paper shifts the focus toward the distribution of income. Using newly developed dynamic panel co-integration techniques to account for the cross-country heterogeneity, cross-section dependence, and feedback effects in the oil-volatility-inequality nexus, it finds that oil abundance increases human capital investment, improves institutional quality, and hence mitigates income inequality. However, oil volatility has the opposite effects. It accords with the recent trend in the resource curse literature that it is the volatility, rather than the level, of oil that causes the paradox of plenty. The results also shed light on the factors that shape a country's response to its oil richness and volatility and offer policy implications for mitigating detriments associated with oil volatility.

The relationship between foreign direct investments (FDI) and natural resource endowment of a country is contentious. This study attempts to study this relationship for Saudi Arabia that is primarily an oil-producing country. In the process, it would also assess the role of institutions, trade openness, and domestic investments in attracting FDI. Using the methodology of cointegration over the data for the period 1984-2016, the study ascertains the presence of ‘resource curse’ in terms of attracting FDI. The study discovers new findings as to the resource curse in attracting FDI are not because of institutional quality which has a positive relationship with FDI. The results also indicate the absence of crowding out of domestic investments. Finally, the study recommends channeling FDI to Greenfield projects with the maximum transfer of management and technology.Keywords: Natural Resource, Institutions, Trade openness, Crowding-out, CointegrationJEL Classifications: E02; F21; O43; P33DOI: https://doi.org/10.32479/ijeep.10359