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Savings, growth and the resource curse hypothesis

By Giles Atkinson and Kirk Hamilton

Abstract

An important connection between recent attempts to understand the determinants of economic growth and the measurement of sustainability is the finding of a negative and significant relationship between natural resource abundance and economic growth. This is the so-called resource curse hypothesis. Using cross-country regressions, we offer evidence that the curse may itself be a manifestation of the inability of governments to manage large resource revenues sustainably. In particular, these results offer another perspective on the resource curse hypothesis: the countries where growth has lagged are those where the combination of natural resource, macroeconomic and public expenditure policies have led to a low rate of genuine saving (net saving adjusted for resource depletion)

Topics: HB Economic Theory
Publisher: Elsevier
Year: 2003
DOI identifier: 10.1016/j.worlddev.2003.05.001
OAI identifier: oai:eprints.lse.ac.uk:2882
Provided by: LSE Research Online
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