Resource Wealth is an Amplifier, Not a Curse: Evidence from Country-Level Effects of Exogenous Variation in Resource Endowments
Year: 2012
Type: article
Abstract: Is there a resource curse?We apply a new tool, the method of synthetic controls, to test old claims, that large oil endowments retard democratization and economic growth.To directly estimate the impact of resource wealth, we take advantage of the 1973 opec oil embargo, which caused a massive price spike that transformed previously marginal oil-producing countries into resource-reliant states.By estimating the counterfactual experiences of those countries, we find that there is little evidence of either a political or an economic resource curse.Nevertheless, resource wealth does affect policy outcomes.Leaders use resource wealth to pursue their policy preferences with greater vigor, a finding consistent with a theory of policy substitution that predicts greater variance in the choices of resourcerich regimes.Because resource wealth affords leaders greater policy autonomy, we conclude that resource wealth is not a curse but an amplifier.
Authors: Paul Musgrave, Yu-Ming Liou
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1163156137