Resource Wealth and the Allocation of Economic Effort: a Theoretical Framework for Structural Transformation
Year: 2026
Type: article
Abstract: Natural resource abundance generates substantial economic opportunities but may also alter the incentives of economic agents. This paper develops a theoretical political economy model in which firms allocate resources between productive activities and lobbying efforts aimed at obtaining government-controlled resource rents. The model demonstrates that higher resource rents increase incentives for rent-seeking behavior, reduce productive investment, and weaken structural transformation. Unlike traditional explanations that focus on exchange rate appreciation and factor reallocation, the analysis highlights lobbying competition as an additional mechanism linking resource abundance to economic performance. The results further show that stronger institutions reduce incentives for rent-seeking and improve resource allocation. The paper contributes to the literature by integrating resource economics, rent-seeking theory, and political economy within a unified framework.
Source: CyberLeninK (CyberLeninka)
Author: Muradov A.
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7204259481