Testing the Natural Resource Curse Hypothesis in Indonesia: Evidence at the Regional Level

Abstract

Resource curse literatures explain that countries abundant with natural resources tend to grow slower. This hypothesis is relevant for Indonesia as it is a country rich in natural resources. This paper tries to investigate empirically the relationship between resources abundance and its impact on economic development at the regional level using cross section regression approach. The regional financial data from ministry of finance are combined with regional specific data from BPS to seek the pattern. The paper will shed light on whether resources rich regions in Indonesia are trapped in this curse.Natural resource rent, resource curse hypothesis, Indonesia