December 1, 1995Open Access
Natural Resource Abundance and Economic Growth
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Implication
Cross-country analysis reveals slower economic growth in resource-abundant nations, highlighting significant structural barriers associated with natural resource wealth.
Key Points
- This study investigates the theoretical and empirical relationship between high natural resource endowments and long-term rates of economic growth across countries.
- Formulated an endogenous growth model incorporating trade dynamics and natural resource sectors.
- Conducted cross-country empirical regressions controlling for baseline income levels, investment rates, and trade openness.
- Natural resource abundance exhibits a robust, statistically significant negative relationship with real per-capita economic growth rates.
- Controlling for standard growth determinants, including trade policy and capital accumulation, does not eliminate the growth penalty of resource dependence.
Cite This Study
Sachs et al. (1995) studied this question.