IDEAS home Printed from https://ideas.repec.org/a/wsi/gejxxx/v18y2018i04ngej-2018-0057.html
   My bibliography  Save this article

Does Institution Explain Natural Resource Curse?

Author

Listed:
  • Joseph Pelzman

    (The George Washington University, Washington, D.C., USA)

  • Yessengali Oskenbayev

    (Narxoz University, Almaty, Kazakhstan)

  • Murat Issabayev

    (Narxoz University, Almaty, Kazakhstan)

Abstract

In this paper we study the natural resource curse by analyzing the cross-regional sample from Kazakhstan. Our focus is to understand if the institutional quality within the country explains the resource curse. Using the data for 14 regions in Kazakhstan between 2000 and 2010 and employing various panel data approaches, we find that the institutional quality is not a determinant of the resource curse as institution changes very slowly within the country over time. This statement surely contradicts with previous resource curse literatures that utilized cross-country sample counting the fact that institutions vary across countries. Instead here, we argue that the resource curse within the country arises as a result of commodity price volatility.

Suggested Citation

  • Joseph Pelzman & Yessengali Oskenbayev & Murat Issabayev, 2018. "Does Institution Explain Natural Resource Curse?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 18(4), pages 1-9, December.
    • Handle: RePEc:wsi:gejxxx:v:18:y:2018:i:04:n:gej-2018-0057
    DOI: 10.1142/GEJ-2018-0057
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/GEJ-2018-0057
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/GEJ-2018-0057?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(6), pages 1157-1160, December.
    2. Balazs Egert & Carol Leonard, 2008. "Dutch Disease Scare in Kazakhstan: Is it real?," Open Economies Review, Springer, vol. 19(2), pages 147-165, April.
    3. van der Ploeg, Frederick & Poelhekke, Steven, 2010. "The pungent smell of "red herrings": Subsoil assets, rents, volatility and the resource curse," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 44-55, July.
    4. Torvik, Ragnar, 2001. "Learning by doing and the Dutch disease," European Economic Review, Elsevier, vol. 45(2), pages 285-306, February.
    5. Turnovsky, Stephen J. & Chattopadhyay, Pradip, 2003. "Volatility and growth in developing economies: some numerical results and empirical evidence," Journal of International Economics, Elsevier, vol. 59(2), pages 267-295, March.
    6. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
    7. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, December.
    8. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 2002. "Governance matters II - updated indicators for 2000-01," Policy Research Working Paper Series 2772, The World Bank.
    9. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, vol. 61(2), pages 527-542, April.
    10. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(5), pages 1025-1031, October.
    11. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
    12. Aghion, Philippe & Bacchetta, Philippe & Rancière, Romain & Rogoff, Kenneth, 2009. "Exchange rate volatility and productivity growth: The role of financial development," Journal of Monetary Economics, Elsevier, vol. 56(4), pages 494-513, May.
    13. Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
    14. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
    15. Murshed, S. Mansoob, 2004. "When Does Natural Resource Abundance Lead to a Resource Curse?," Discussion Papers 24137, International Institute for Environment and Development, Environmental Economics Programme.
    16. Kuralbayeva, Karlygash & Kutan, Ali M. & Wyzan, Michael L., 2001. "Is Kazakhstan vulnerable to the Dutch disease?," ZEI Working Papers B 29-2001, University of Bonn, ZEI - Center for European Integration Studies.
    17. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    18. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    19. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," The World Bank Economic Review, World Bank, vol. 19(2), pages 141-174.
    20. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    21. Richard M. Auty, 1997. "Natural Resource Endowment, The State And Development Strategy," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 651-663.
    22. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    23. Blattman, Christopher & Hwang, Jason & Williamson, Jeffrey G., 2007. "Winners and losers in the commodity lottery: The impact of terms of trade growth and volatility in the Periphery 1870-1939," Journal of Development Economics, Elsevier, vol. 82(1), pages 156-179, January.
    24. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nurlan Kurmanov & Yerzhan Beisengaliyev & Marat Bayandin & Elmira Syzdykova & Madina Tolysbayeva, 2022. "Innovative Development of Kazakhstan s Raw Material (Oil and Gas) Regions: Multifactorial Model for Empirical Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 131-140, July.
    2. Hasanov, Fakhri J. & Aliyev, Ruslan & Taskin, Dilvin & Suleymanov, Elchin, 2023. "Oil rents and non-oil economic growth in CIS oil exporters. The role of financial development," Resources Policy, Elsevier, vol. 82(C).
    3. Yadulla Hasanli & Elkhan Richard Sadik-Zada & Simrah Ismayilova & Günay Rahimli & Farida Ismayilova, 2023. "Could the Lacking Absorption Capacity of the Inflowing Capital Be the Real Cause of the Resource Curse?—A Case Study of Transition Economies," Sustainability, MDPI, vol. 15(14), pages 1-17, July.
    4. Gemicioğlu, Selçuk & Soyhan, Sinem & Mollavelioğlu, M. Şükrü, 2024. "Do natural resources lead to a curse or blessing in terms of income inequality?," Resources Policy, Elsevier, vol. 88(C).

    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. Karimov, Aziz & Oskenbayev, Yessengali, 2013. "Is Kazakhstan Vulnerable to Natural Resource Curse?," WIDER Working Paper Series 130, World Institute for Development Economic Research (UNU-WIDER).
    2. Yessengali Oskenbayev & Aziz Karimov, 2013. "Is Kazakhstan Vulnerable to Natural Resource Curse?," WIDER Working Paper Series wp-2013-130, World Institute for Development Economic Research (UNU-WIDER).
    3. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    4. Tiago V. De V. Cavalcanti & Kamiar Mohaddes & Mehdi Raissi, 2015. "Commodity Price Volatility and the Sources of Growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(6), pages 857-873, September.
    5. International Monetary Fund, 2012. "Commodity Price Volatility and the Sources of Growth," IMF Working Papers 2012/012, International Monetary Fund.
    6. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    7. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    8. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    9. Bisio, Laura & Ventura, Luigi, 2012. "Growth and volatility reconsidered: reconciling opposite views," MPRA Paper 35937, University Library of Munich, Germany.
    10. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    11. Mehrdad Vahabi, 2017. "A critical survey of the resource curse literature through the appropriability lens," CEPN Working Papers 2017-14, Centre d'Economie de l'Université de Paris Nord.
    12. Eliane Cristina de Araújo, 2011. "Volatilidade Cambial e Crescimento Econômico: Teorias e Evidências para Economias em Desenvolvimento e Emergentes (1980 e 2007)," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 12(2), pages 187-213.
    13. De Rosa, Donato & Iootty, Mariana, 2012. "Are natural resources cursed ? an investigation of the dynamic effects of resource dependence on institutional quality," Policy Research Working Paper Series 6151, The World Bank.
    14. Bittencourt, Manoel & Gupta, Rangan & Stander, Lardo, 2014. "Tax evasion, financial development and inflation: Theory and empirical evidence," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 194-208.
    15. Mehrdad Vahabi, 2018. "The resource curse literature as seen through the appropriability lens: a critical survey," Public Choice, Springer, vol. 175(3), pages 393-428, June.
    16. Marcelo Soto, 2009. "System GMM estimation with a small sample," Working Papers 395, Barcelona School of Economics.
    17. Leong, W. & Mohaddes, K., 2011. "Institutions and the Volatility Curse," Cambridge Working Papers in Economics 1145, Faculty of Economics, University of Cambridge.
    18. Dong-Hyeon Kim & Shu-Chin Lin, 2017. "Natural Resources and Economic Development: New Panel Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 363-391, February.
    19. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    20. Behzadan, Nazanin & Chisik, Richard & Onder, Harun & Battaile, Bill, 2017. "Does inequality drive the Dutch disease? Theory and evidence," Journal of International Economics, Elsevier, vol. 106(C), pages 104-118.

    More about this item

    Keywords

    energy production; Kazakhstan; institution; commodity price volatility; resource curse;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

    Statistics

    Access and download statistics

    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:wsi:gejxxx:v:18:y:2018:i:04:n:gej-2018-0057. 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: Tai Tone Lim (email available below). General contact details of provider: https://www.worldscientific.com/worldscinet/gej .

    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.