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The Rentier Predatory State Hypothesis: An Empirical Explanation Of The Resource Curse

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  • KHALID R. ALKHATER

    (Qatar Central Bank and Georgetown University, Qatar)

Abstract

This paper introduces an empirical growth model that explains the perplexing observed growth resource regime dubbed the resource curse. The main hypothesis advanced in this paper, the rentier predatory state hypothesis, holds that under autocracy, the interaction between political power and resource abundance is expected to lead to poor economic outcomes in the long run. In the empirical model, resource abundance is allowed to interact with political repression to generate a negative impact on economic growth. Depending on the extent of the repression, a state dependent on natural resources (a rentier state) can also become a predatory state, i.e., a rentier predatory state, or, in other words, a rentier state with a high rate of political repression. The resulting net effect of resource abundance on economic growth is contingent on the extent of the repression, and a resource-abundant state with a sufficiently high rate of political repression will have negative economic growth, while a state with a low to moderate rate of political repression will have positive economic growth.

Suggested Citation

  • Khalid R. Alkhater, 2012. "The Rentier Predatory State Hypothesis: An Empirical Explanation Of The Resource Curse," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(4), pages 29-60, December.
    • Handle: RePEc:jed:journl:v:37:y:2012:i:4:p:29-60
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    More about this item

    Keywords

    Rentier Predatory State; Political Repression; Economic Growth; Resource Curse; Developing Countries;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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