ABSTRACT: I review the relationship between natural resource endowment type and economic growth in developing countries. Certain types of natural resources such as oil and minerals tend to exhibit concentrated production and revenue patterns, while revenue flows from other resources such as agriculture are more diffused. Most developing countries that export products from the first group are prone to growth failure in recent times. The most important channels are political economy mechanisms, where there are negative relationships between natural resource rents and institutional development. An explicit model of growth collapse with micro-foundations in rent-seeking contests that have increasing returns in rent seeking outlays is presented.

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ISS Staff Group 1: Economics of Sustainable Development
Pakistan Development Review
International Institute of Social Studies of Erasmus University (ISS)

Murshed, S. (2008). What Turns a Blessing into a Curse? The Political Economy of Natural Resource Abundance. Pakistan Development Review, 46(4), 351–377. Retrieved from http://hdl.handle.net/1765/32342