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The Relative Richness of the Poor? Natural Resources, Human Capital, and Economic Growth
Open accessAbstract
Are natural resources a blessing or a curse? Bravo-Ortega and De Gregorio present a model in which natural resources have a positive effect on the level of income and a negative effect on its growth rate. The positive and permanent effect on income implies a welfare gain. There is a growth effect stemming from a composition effect. However, the authors show that this effect can be offset by having a large level of human capital. They test their model using panel data for the period 1970-90. They extend the usual specifications for economic growth regressions by incorporating an interaction term between human capital and natural resources, showing that high levels of human capital may outweigh the negative effects of the natural resource abundance on growth. The authors also review the historical experience of Scandinavian countries, which in contrast to Latin America, another region well-endowed with natural resources, shows how it is possible to grow fast based on natural resources. This paper is a product of the Office of the Chief Economist, Latin America and the Caribbean Region.
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Cites
On the mechanics of economic development
Lucas, R. E. (1988) · Journal of Monetary Economics · doi:10.1016/0304-3932(88)90168-7 · Cited by 24,085
Hsiao, C. (2014) · doi:10.1017/cbo9781139839327 · Cited by 7,869
Cited by
The resource curse revisited and revised: A tale of paradoxes and red herrings
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Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth
Brunnschweiler, C. N. (2008) · World Development · doi:10.1016/j.worlddev.2007.03.004 · Cited by 710
Shao, S., & Yang, L. (2014) · Energy Policy · doi:10.1016/j.enpol.2014.07.007 · Cited by 287
Guan, J., Kirikkaleli, D., Bibi, A., & Zhang, W. (2020) · Resources Policy · doi:10.1016/j.resourpol.2020.101641 · Cited by 269
The effects of natural resources on human capital accumulation: A literature survey
Mousavi, A., & Clark, J. (2021) · Journal of Economic Surveys · doi:10.1111/joes.12441 · Cited by 45
Metadata
- Authors
- Bravo-Ortega, C., & de Gregorio, J.
- Venue
- World Bank, Washington, DC eBooks
- Publisher
- World Bank, Washington, DC
- Published
- 2005-01
- OpenAlex
- W3125980579
- Cited by
- 296
- References
- 2
- Type
- report
- Language
- en
- Open access
- green
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