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Natural Resource Abundance and Economic Growth

Sachs, Jeffrey D.; Warner, Andrew M.

One of the surprising features of modern economic growth is that economies abundant in natural resources have tended to grow slower than economies without substantial natural resources. In this paper we show that economies with a high ratio of natural resource exports to GDP in 1970 (the base year) tended to grow slowly during the subsequent 20-year period 1970-1990. This negative relationship holds true even after controlling for many variables found to be important for economic growth by previous authors. We discuss several theories and present additional evidence to understand the source of this negative association.

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Earth Institute
Published Here
October 1, 2009

Notes

"The Big Push, Natural Resource Booms and Growth," Journal of Development Economics, vol. 59, no. 1 (June 1999), pp. 43-76.