Abstract

An important question in development studies is how natural resources richness affects long-term economic growth. No consensus answer, however, has yet emerged, with approximately 40% of empirical papers finding a negative effect, 40% finding no effect, and 20% finding a positive effect. Does the literature taken together imply the existence of the so-called natural resource curse? In a quantitative survey of 605 estimates reported in 43 studies, we find that overall support for the resource curse hypothesis is weak when potential publication bias and method heterogeneity are taken into account. Our results also suggest that four aspects of study design are especially effective in explaining the differences in results across studies: 1) controlling for institutional quality, 2) controlling for the level of investment activity, 3) distinguishing between different types of natural resources, and 4) differentiating between resource dependence and abundance.

Funnel plot
Fig: After correcting for publication bias, there is little evidence for the so-called natural resource curse.

Reference: Tomas Havranek, Roman Horvath, and Ayaz Zeynalov (2016), "Natural Resources and Economic Growth: A Meta-Analysis." World Development 88, 134-151.

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Headline result

Natural resource curse (effect of resource richness on long-run growth): the meta-analytic finding is weak support for a curse, based on 605 estimates from 43 studies (Havranek et al. 2016, World Development).

Note on Table 3

The note to Table 3 says the standard errors are clustered at the study level. Panel A was in fact estimated without clustering: heteroskedasticity-robust standard errors reproduce the printed t-statistics exactly. Clustered by study the coefficients are unchanged and the inference is weaker, with t of 1.73 rather than 5.18 on the standard-error term. The constant's t-statistic and p-value are 1.61 and 0.109 rather than the printed 1.69 and 0.099. Panel B is unaffected. The R replication reports both specifications.

How to cite

Tomas Havranek, Roman Horvath, and Ayaz Zeynalov (2016), "Natural Resources and Economic Growth: A Meta-Analysis." World Development 88, 134-151.

BibTeX 
@article{havranek2016resource_curse,
  author  = {Tomas Havranek and Roman Horvath and Ayaz Zeynalov},
  title   = {Natural Resources and Economic Growth: A Meta-Analysis},
  journal = {World Development},
  year    = {2016},
  doi     = {10.1016/j.worlddev.2016.07.016},
}