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While many consider institutional quality as a central explanatory variable when finding what causes the variance in per capita GDP growth performance of resource-abundant countries, this paper attempts to focus on more structural factors: regime type and its ideological approaches to economic policy. Several joint effects of natural resource abund...
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... On the contrary, natural resources provide the necessary income to stimulate growth (Brunnschweiler and Bulte, 2008;James, 2015). 3 The intersection of these two groups of works results in a third paradigm, demonstrating how the impact of natural resources is influenced by constitutional arrangements (Andersen and Aslaksen, 2008), governance (Boschini et al., 2013), political regime type (Mehlum et al., 2006;Ajide et al., 2020), ownership structures (Khanna, 2017), political ideology (Kim and Lee, 2018), and human capital (Gylfason, 2001). ...
... Furthermore, for Acemoglu et al. (2005), the type of political regime that prevails in an economy shapes the behavior of elites who decide on the remuneration of natural resource rents by defining the discretion they can have. Moreover, Kim and Lee (2018) find significant differences within the types of democracies (presidential and parliamentary democracies) in the probability of the resource curse. They also find that presidential democracies with left-wing economic policies are the least growth-friendly with similar levels of natural resource abundance. ...
... There are three types of ideological orientation of leaders in economic policy: left, center, and right. According to Kim and Lee (2018), non-left-wing regimes are classified as center-and right-wing regimes. ...
This study examines the effects of natural resource abundance on economic complexity using a large panel dataset of 108 countries from 1995 to 2017. In addition, it examines whether this relationship is influenced by the type of democratic regime and political ideology. The empirical analysis is based on the generalized method of moments (GMM), and the following results are established: (i) Natural resource abundance has a net negative impact on economic complexity. This result is robust to several alternative specifications, including the use of additional covariates; the use of alternative measures of economic complexity and natural resources; and the use of an alternative data structure. (ii) A heterogeneity analysis of our results shows that the effect of natural resource abundance differs by level of development, with natural resources having a negative and significant effect only in developing countries. (iii) When looking at the role of regime type, the results show that democracies (whether electoral, liberal, deliberative, participatory, or egalitarian) mitigate the negative effects of natural resource abundance on economic complexity. (iv) When decomposing our sample into parliamentary and presidential democratic regimes, the results show that only parliamentary democracies mitigate the negative effects of natural resource abundance. (v) Finally, however, further analysis reveals that parliamentary democratic regimes, whether left-wing or not, are more effective in mitigating the negative effects of natural resource abundance than left-wing presidential democratic regimes. Policy implications are drawn from these results.
... For instance, democracy and institutional quality are difficult to measure, and empirical and econometric research usually fails to accurately capture multidimensional connections (Paolo 2008). Notably, a study argued that the NRC is more widespread in presidential and authoritarian regimes than in democratic regimes (Kim-Lee 2018). ...
While the oil boom played a positive role in Azerbaijan’s economy by reducing poverty and increasing overall prosperity, the country’s industrial structure became lopsided and favored oil and gas production. Typically, the contraction of non-oil tradeable sectors (e.g., manufacturing) in oil-rich countries places an economic and social burden on society. The manufacturing sector can stimulate innovative actions triggered by policy decisions and improve the political and institutional environment. To determine the reasons for the one-sided industrial production, it is crucial to explain Azerbaijan’s economy with sound theories and elucidate the largest economic challenges. Thus, the Dutch disease (DD)-related de industrialization of non-oil manufacturing is the main focus of this dissertation. DD is a form of de-industrialization when natural resources are discovered or commodity prices skyrocket, resulting in unexpectedly high revenues. This situation shifts the attention of resource-rich governments from non-commodity production to commodity exports, motivating them to spend natural resource revenues within a short period of time. However, not all de industrialization of a particular nonoil sector is likely to be due to an oil boom. The general institutional environment and human capital also play critical roles. DD is a useful theory for explaining why in a small, open, and oil-rich country like Azerbaijan, non-oil manufacturing deindustrialization has occurred in parallel with the oil boom since 2005/06.
... On the contrary, natural resources provide the necessary income to stimulate growth (Brunnschweiler and Bulte 2008;James, 2015). At the intersection of these two groups of works, a third paradigm shows that the effect of natural resources depends on constitutional arrangements (Andersen and Aslaksen, 2008), ownership (Khanna, 2017) regime types, ideological leanings (Kim and Lee, 2018) and governance (Belarbiet al., 2021), among others. ...
The study assesses the role of governance in modulating the effect of oil wealth on wealth inequality in 45 countries in the world. The empirical evidence is based on Pooled Ordinary Least Squares and the Generalised Method of Moments. The findings show that oil rents unconditionally increase wealth inequality while govenance dyanmics (in terms of rule of law, corruption-control, government effectiveness, regulatory quality) moderate oil rents for an overall net negative effect on wealth inequality. Good governance thresholds at which the unconditional effect of oil rents on the wealth inequality changes from positive to negative are computed and discussed. It follows that while governance is a necessary condition for improving the redistributive effects of oil wealth, it becomes a sufficient condition for net positive improvements in wealth distribution only when some critical levels of good governance have been reached. Other policy implications are discussed.
... When trade, education and industrial structures are impeded, economic recession occurs [2,3]. Meanwhile, resource exploitation might cause institutional corruption and reduce operating efficiency [4][5][6][7]. However, some studies have pointed out that the negative correlation between resource dependence and long-term economic growth is not justified, and there is no convincing evidence to testify the inevitable institutional factors for corruption [8,9]. ...
As mineral resources are the material basis of social and economic development, the study on the correlation between the mineral resource industry and the regional economy, which aims at a scientific division of economic zones and a clear understanding of industrial characteristics, is crucial in addressing issues related to the management of resources and economy such as regional industrial development and territorial and spatial planning. By discussing the relation between dependence on mineral resources and national economy development, this study divides the Chinese mainland into three resource-based regions, nine resource-assisted regions and 19 non-resource-based regions based on quantified regional differences underpinned by the theory of threshold effects for measurement data. Furthermore, policy recommendations are proposed to pave the path for differentiated regional development after considering multiple factors including features of regional economy and resource potential. In addition to better serving and supporting economic development, territorial and spatial planning and the strategy of mineral resources, such recommendations are expected to provide differentiated development strategies for different types of regions.
La calidad institucional resulta fundamental para explicar las diferencias de desarrollo económico entre países ricos en recursos naturales. Sin embargo, más allá de la importancia atribuida a las instituciones, la literatura existente no aclara la forma en que influye la calidad institucional sobre los recursos naturales ni ofrece prescripciones claras con relación al tipo de instituciones necesarias para favorecer el desarrollo basado en un aprovechamiento sostenible de los recursos naturales. Este artículo presenta una revisión sistemática de la literatura sobre la importancia de la calidad institucional en los efectos de los recursos naturales no renovables sobre el desarrollo económico. Se revisa críticamente el papel de las instituciones, tratando de aclarar lo que la literatura académica ha revelado con relación al tipo de instituciones, a cómo y dónde importan. Esta revisión permite concluir que la forma en que importan las instituciones es compleja, diversa y más difusa de lo que generalmente se asume. Otra contribución del artículo consiste en indicar algunos de los retos a los que se enfrentan las investigaciones futuras para aprovechar mejor los recursos naturales a partir de la mejora de las instituciones, particularmente en los países en desarrollo.
