The Complex Curse. Examining conditions for the resource curse.

Abstract

According to the resource curse hypothesis, natural resource abundance can lead to lower growth. The literature has mainly focused on economic explanations, but some scholars have suggested that the curse can be turned into a blessing with good institutions. It has been argued that Quality of Government (QoG) and constraints on executives are important conditions for economic growth but these aspects have not been studied in depth in the resource curse literature. This thesis therefore examines whether theories regarding QoG, constraints on executive and the resource curse are supported in an empirical regression analysis of more than 40 countries over 16 years. The thesis also presents an extensive literature review on the explanations of the curse. The main result from this thesis is that the curse is only evident in countries with low QoG. Countries with high QoG avoid the curse and benefits from their natural resources. The evidence for a curse is not as strong as some scholars argue. The political-institutional variables upraised here need to be explored by further research in order to test whether stronger effect on the resource curse exists.