Skip Navigation


Oxford Economic Papers Advance Access originally published online on July 30, 2009
Oxford Economic Papers 2009 61(4):628-650; doi:10.1093/oep/gpp023
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
61/4/628    most recent
gpp023v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Caselli, F.
Right arrow Articles by Cunningham, T.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© Oxford University Press 2009 All rights reserved

This article appears in the following Oxford Economic Papers issue: Symposium on Resource Rich Economies [View the issue table of contents]

Leader behaviour and the natural resource curse

Francesco Caselli* and Tom Cunningham{dagger}

*London School of Economics, National Bureau of Economic Research, and Centre for Economic Policy Research
{dagger}Center for Economic Performance, London School of Economics, London WC2A 2AE; e-mail: t.e.cunningham{at}lse.ac.uk

JEL classifications: O13, D72, Q32, Q34


  Abstract

We discuss political economy mechanisms which can explain the resource curse, in which an increase in the size of resource rents causes a decrease in the economy's; total value added. We identify a number of channels through which resource rents will alter the incentives of a political leader. Some of these induce greater investment by the leader in assets that favour growth (infrastructure, rule of law, etc.), others lead to a potentially catastrophic drop in such activities. As a result, the effect of resource abundance can be highly non-monotonic. We argue that it is critical to understand how resources affect the leader's ‘survival function’, i.e. the reduced-form probability of retaining power. We also briefly survey decentralized mechanisms, in which rents induce a reallocation of labour by private agents, crowding out productive activity more than proportionately. We argue that these mechanisms cannot be fully understood without simultaneously studying leader behaviour.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.