Book contents
- Frontmatter
- Contents
- Contributors
- Preface
- I FINANCE
- II POLITICAL ECONOMY
- 2 Institutional Comparative Statics
- 3 The Political Economy of Mass Media
- 4 Comments on Prat and Strömberg, and Robinson and Torvik
- III MACROECONOMICS
- IV TRADE AND FIRM DYNAMICS
- V GROWTH
- VI FRISCH LECTURE
- VII PERSPECTIVES ON CHINESE ECONOMIC GROWTH
- Name Index
- Miscellaneous Endmatter
2 - Institutional Comparative Statics
Published online by Cambridge University Press: 05 May 2013
- Frontmatter
- Contents
- Contributors
- Preface
- I FINANCE
- II POLITICAL ECONOMY
- 2 Institutional Comparative Statics
- 3 The Political Economy of Mass Media
- 4 Comments on Prat and Strömberg, and Robinson and Torvik
- III MACROECONOMICS
- IV TRADE AND FIRM DYNAMICS
- V GROWTH
- VI FRISCH LECTURE
- VII PERSPECTIVES ON CHINESE ECONOMIC GROWTH
- Name Index
- Miscellaneous Endmatter
Summary
Introduction
What is the impact of productive natural resources on national income? The conventional wisdom in U.S. and British economic history is that natural resources are good for prosperity, even crucial (Wright 1990; Wrigley 2004; Allen 2008). In fact, the greater natural resources available to Great Britain and Western Europe is arguably one of the key reasons for their divergence from China in the early modern period (Pomeranz 2000).
Although compelling because natural resources seem to raise income in a mechanical way, this view faces some striking empirical puzzles. The first set concerns the “Dutch Disease” and the impact of natural-gas discoveries on the competitiveness of manufacturing in the Netherlands. The second set suggests a more general negative correlation between economic growth and the importance of natural resources in the economy (Sachs and Warner 1995). Since then, such findings have expanded into a whole literature on the “resource curse,” replete with detailed case studies as well as econometric results. Indeed, Sachs and Warner (2001, pp. 828, 837) argued:
What the studies based on the post-war experience have argued is that the curse of natural resources is a demonstrable empirical fact, even after controlling for trends in commodity prices…. Almost without exception, the resource-abundant countries have stagnated in economic growth since the early 1970s, inspiring the term “curse of natural resources.” Empirical studies have shown that this curse is a reasonably solid fact.
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- Advances in Economics and EconometricsTenth World Congress, pp. 97 - 134Publisher: Cambridge University PressPrint publication year: 2013
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