IDEAS home Printed from https://ideas.repec.org/a/mth/jad888/v3y2017i2p60-77.html
   My bibliography  Save this article

The Resource Curse Hypothesis in Lao Economy

Author

Listed:
  • Soukvisan Khinsamone

Abstract

The purpose of this paper is to investigate the adaptability of the resource curse hypothesis for Lao economy. The study verifies the two crowding-out logics that resource abundance would crowd out manufacturing activities and/or savings and investment, by examining their causalities and impulse responses in a vector auto-regression (VAR) model estimation. The estimation outcomes implied the existence of the resource curse in Lao economy: resource production has crowded out manufacturing activities through real exchange rate appreciation, thereby causing the Dutch Disease; and resource production has not contributed significantly to capital accumulation, thereby being not consistent with Hartwick-rule. The study contributed to the literature by verifying two kinds of crowding-out logics on the resource curse by applying a VAR model: the crowding-out of manufacturing activities as a sectoral allocation, and the crowding-out of savings and investment as an intertemporal allocation. The study might also be valuable to the policy makers, since it proposed a strategy for transforming Lao economic structure from "resource curse" to "resource blessing" by setting up some institutional framework to allocate resource revenues to infrastructure development.

Suggested Citation

  • Soukvisan Khinsamone, 2017. "The Resource Curse Hypothesis in Lao Economy," Journal of Asian Development, Macrothink Institute, vol. 3(2), pages 60-77, November.
  • Handle: RePEc:mth:jad888:v:3:y:2017:i:2:p:60-77
    as

    Download full text from publisher

    File URL: http://www.macrothink.org/journal/index.php/jad/article/view/11128/9004
    Download Restriction: no

    File URL: http://www.macrothink.org/journal/index.php/jad/article/view/11128
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    2. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    3. Kyophilavong, Phouphet & Senesouphap, Chanthachonh & Yawdhacksa, Somnack, 2012. "Resource Boom, Growth and Poverty in Laos: what can we learn from other countries and policy simulations?," PEP Policy Briefs 161661, Partnership for Economic Policy (PEP).
    4. Anne D. Boschini & Jan Pettersson & Jesper Roine, 2007. "Resource Curse or Not: A Question of Appropriability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(3), pages 593-617, September.
    5. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lebdioui, Amir, 2021. "The Multidimensional Indicator of Extractives-based Development (MINDEX): A new approach to measuring resource wealth and dependence," World Development, Elsevier, vol. 147(C).
    2. Tsopmo, Pierre Christian & Mbouombouo Vessah, Salim Ahmed & Soumtang Bime, Valentine & Mondjeli Mwa Ndjokou, Itchoko Motande, 2024. "Do African countries avoid the curse of natural resources on social cohesion?," Resources Policy, Elsevier, vol. 98(C).
    3. Belarbi, Yacine & Hamdi, Fayçal & Khalfi, Abderaouf & Souam, Saïd, 2021. "Growth, institutions and oil dependence: A buffered threshold panel approach," Economic Modelling, Elsevier, vol. 99(C).
    4. Zuo, Na & Zhong, Hua, 2019. "The Effect of Resource Wealth on Regional Economic Development in China," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291114, Agricultural and Applied Economics Association.
    5. Ruba Aljarallah, 2021. "An Analysis of the Impact of Rents from Non-renewable Natural Resources and Changes in Human Capital on Institutional Quality: A Case Study of Kuwait," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 224-234.
    6. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    7. Ramandray, Felix, 2024. "The driving factors of economic growth divergence in resource-rich countries," Resources Policy, Elsevier, vol. 97(C).
    8. Nuno Torres & Óscar Afonso & Isabel Soares, 2013. "A survey of literature on the resource curse: critical analysis of the main explanations, empirical tests and resource proxies," CEF.UP Working Papers 1302, Universidade do Porto, Faculdade de Economia do Porto.
    9. Zuo, Na & Zhong, Hua, 2020. "Can resource policy reverse the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 68(C).
    10. Abdul HANNAN* & Hasan M. MOHSIN**, 2015. "Regional Analysis of Resource Curse Hypothesis: Evidence from Panel Data," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(1), pages 45-66.
    11. Zarach, Zuzanna Helena & Parteka, Aleksandra, 2023. "Export diversification and dependence on natural resources," Economic Modelling, Elsevier, vol. 126(C).
    12. Chi-Swian Wong, 2021. "Science Mapping: A Scientometric Review on Resource Curses, Dutch Diseases, and Conflict Resources during 1993–2020," Energies, MDPI, vol. 14(15), pages 1-48, July.
    13. Kpognon, Koffi D., 2022. "Effect of Natural Resources on the Size of Informal Economy in sub-Saharan Africa: An Empirical Investigation," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 1-14.
    14. Sharma, Chandan & Paramati, Sudharshan Reddy, 2022. "Resource curse versus resource blessing: New evidence from resource capital data," Energy Economics, Elsevier, vol. 115(C).
    15. Emilio Castillo, 2020. "Mineral Exploration and the Discovery of New Deposits," Working Papers 2020-06, Colorado School of Mines, Division of Economics and Business.
    16. Mohammad Abdul Munim Joarder & Monir Uddin Ahmed, 2023. "Does natural resource abundance breed corruption? The role of political institutions," SN Business & Economics, Springer, vol. 3(9), pages 1-43, September.
    17. David Wiens, 2014. "Natural resources and institutional development," Journal of Theoretical Politics, , vol. 26(2), pages 197-221, April.
    18. Aparicio-Pérez, Daniel & Ripollés, Jordi, 2025. "Disentangling the heterogeneous effect of natural resources on economic growth," Economic Modelling, Elsevier, vol. 142(C).
    19. Thomas C. Kinnaman, 2023. "A New Perspective on the Natural Resource Curse," World, MDPI, vol. 4(4), pages 1-14, October.
    20. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:jad888:v:3:y:2017:i:2:p:60-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office The email address of this maintainer does not seem to be valid anymore. Please ask Technical Support Office to update the entry or send us the correct address (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/jad .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.