Foundations and Trends® in Microeconomics > Vol 7 > Issue 2

The Political Economy of the Natural Resource Curse: A Survey of Theory and Evidence

Robert T. Deacon, University of California, Santa Barbara and Resources for the Future, USA, deacon@econ.ucsb.edu
 
Suggested Citation
Robert T. Deacon (2011), "The Political Economy of the Natural Resource Curse: A Survey of Theory and Evidence", Foundations and TrendsĀ® in Microeconomics: Vol. 7: No. 2, pp 111-208. http://dx.doi.org/10.1561/0700000042

Published: 22 Dec 2011
© 2011 R. T. Deacon
 
Subjects
Environmental Economics
 
Keywords
Q5 Environmental EconomicsQ28 government policy on renewable resourcesQ33 resource boomsP48 Political Economy/Natural Resources
Political economyRent seekingNatural resources curseEnvironmental EconomicsAgricultural and Resource EconomicsPolitical Economists
 

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In this article:
1 Introduction and Motivation
2 Political Economy Precursors
3 Models of Rent-seeking and the Resource Curse
4 Models of Political Institutions and the Resource Curse
5 Empirical Contributions
6 Conclusions and Research Directions
References

Abstract

This survey focuses on political economy theories of the resource curse and scrutinizes how well, or poorly, these theories have been integrated with empirical work. One reason why this integration is important lies in the practical importance of pinning down the causal links involved in the resource curse. A second reason for focusing on integration of theory and empirics is that the resource curse is a potentially fruitful venue for testing political economy theories generally.

DOI:10.1561/0700000042
ISBN: 978-1-60198-496-8
108 pp. $75.00
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ISBN: 978-1-60198-497-5
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Table of contents:
1. Introduction and Motivations
2. Political Economy Precursors
3. Models of Rent-Seeking and the Resource Curse
4. Models of Political Institutions and the Resource Curse
5. Empirical Contributions
6. Conclusion and Research Directions
References

The Political Economy of the Natural Resource Curse

The Political Economy of the Natural Resources Curse focuses on political economy theories of the resource curse and scrutinizes how well, or poorly, these theories have been integrated with empirical work. One reason why this integration is important lies in the practical importance of pinning down the causal links involved in the resource curse. A second reason for focusing on integration of theory and empirics is that the resource curse is a potentially fruitful venue for testing political economy theories generally. The Political Economy of the Natural Resources Curse starts with an overview of the broader economic literature on the resource curse, explaining how interest first arose and summarizing the market-based and political economy theories developed to explain it. After these preliminaries, the focus tightens to political economy research on the resource curse and examines theories and empirical evidence on the link between political conditions and perverse responses to resource booms. Section 3 reviews political economy theories of the resource curse based on rent-seeking. Section 4 reviews political economy theories that incorporate institutions explicitly. Papers offering general empirical findings without developing new theory are covered in Section 5. Conclusions are presented in Section 6 and focus on strengths and weaknesses of the existing literature, whether empirical analysis has successfully corroborated or refuted predictions from theoretical analysis, opportunities for future empirical research, and the question of whether or not the resource curse is a 'real' phenomenon.

 
MIC-042