Natural Resources: A Blessing or a Curse?

We examine empirically the effect of natural resource abundance on economic growth. We find that natural resources have a negative impact on growth when considered in isolation, but a positive impact on growth when including in the analysis other variables such as corruption, investments, openness, terms of trade, and schooling, and treating these variables as independent. However, when we take account of the effect of natural resources on the other variables and furthermore consider the indirect effect on growth, that is, when we examine possible transmission channels, we find a strong negative effect of natural resources on growth. Finally, we calculate the relative importance of each transmission channel.Natural Resources, growth, transmission channels

Institutional Explanations of Economic Development: the Role of Precious Metals

Recent research has emphasized the influence of colonization on the institutional development and economic performance in former European colonies. Where European colonizers settled, they replicated the investment-conducive institutions found at home. It has been argued that a harsh disease environment and a highly urbanized native population worked against colonization. We show evidence for another significant element explaining the endogenous character of colonization strategies and the formation of institutions. We find the presence of precious metals, gold and silver, to imply an increase in settlements, and an improvement in institutional quality, even when correcting for settlements. Highly valued gold and silver reserves attracted Europeans in large numbers and resulted in an institutional upgrade of mineral-rich areas.Precious metals, Institutions, Economic development

The greying church: the impact of life expectancy on religiosity

Purpose: In recent years, there has been an expanding literature on the socio-economic determinants of religiosity. The purpose of this paper is to contribute to this stream of the literature by studying the impact of life expectancy on religiosity through a theoretical decision-making framework, and by separately examining the decision of young and old individuals with respect to religious participation. Design/methodology/approach: The paper analyses religiosity through a cost-benefit framework, where decisions at each point in time depend on expected social and spiritual benefits attached to religious adherence (both contemporaneously, as well as in the afterlife), the probability of entering heaven in the afterlife, as well as the costs of formal religion in terms of time allocated to religious activities. It provides the theoretical underpinnings for the negative correlation between life expectancy and religious attendance previously observed in empirical analysis. Findings: The analysis reveals how increases in life expectancy encourage postponement of religious involvement, particularly in religion doctrines that do not necessarily link salvation (or afterlife benefits more broadly) to the timing of religiosity. This demonstrates that religious establishments should anticipate to attract older members, particularly in countries which have high life expectancy or expect significant increases in life expectancy, although current socio-economic benefits can counterbalance the negative impact of life expectancy on religiosity and hence encourage religious involvement. Originality/value: The paper contributes to the literature on the economics of religion by exploring the mediating role of life expectancy in explaining cross-country differences in religious expression, a channel that has so far received little attention in the literature. Its innovation lies in distinguishing decision making over different time intervals and evaluating the role of benefits and costs through the life cycle and in the afterlife. © Emerald Group Publishing Limited

Natural Resources, Investment and Long-Term Income

We study the negative correlation between natural resource-abundance and long-term income focusing on the savings-investment channel. We first present empirical evidence on this channel and then develop an OverLapping-Generations (OLG) model to study the issue. In this model, savings adjust downwards to income from natural resources, and investment in capital contributes to knowledge creation, a feature based on endogenous growth theory. We analyze the link from resource income future income through savings and investment. Natural resources have two counteracting effects on income. In the short term, resource wealth augments income, but in the long-term, it decreases income through a crowding-out effect on capital and knowledge. We discuss different scenarios under which the resource curse is most likely to take place.Natural resources, Growth, Investment, OLG models

Natural Resources, Innovation, and Growth

This paper investigates the connection between resource abundance and innovation, as a transmission mechanism that can elucidate part of the resource curse hypothesis; i.e. the observed negative impact of resource wealth on income growth. We develop a variation of the Ramsey-Cass-Koopmans model with endogenous growth to explain the phenomenon. In this model, consumers trade off leisure versus consumption, and firms trade off innovation efforts versus manufacturing. For this model, we show that an increase in resource income frustrates economic growth in two ways: directly by reducing work effort and indirectly by inducing a smaller proportion of the labor force to engage in innovation.Natural Resources, Growth, Innovation

The scale of transition: an integrated study of the performance of CHP biomass plants in the Netherlands

Combined heat and power (CHP) plants using biomass are considered important to substantially increase the share of renewables in the total energy supply and meet ambitious climate targets. The analysis focuses on the links between the size of bio-fuelled CHP plants and their techno-economic and environmental performance, as well as social acceptance. In an exploratory way, this paper compares the performance of six bioenergy plants in the Netherlands in these three key areas, thereby focusing on the link between the size of biomass plants and overall performance in an integrated multi-dimensional manner. The findings show that economic and environmental performance does not necessarily improve with scale and, in effect, several large-scale biomass plants score low in several environmental indicators. In addition, we find that there is often limited data availability on economic, environmental and social characteristics of biomass plants in the Netherlands, despite the fact that their operations are largely supported by public funds