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The Resource Curse and Fiscal Policy Volatility

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  • Michael Bleaney
  • Håvard Halland

Abstract

Using data from 1980 to 2004, we show that greater fiscal policy volatility acts as a transmission mechanism for the ‘resource curse’. Resource exports dominate political and institutional variables as determinants of fiscal policy volatility, with fiscal policy volatility being a significant determinant of growth. The existence of a resource curse is confirmed, in the sense that a higher ratio of natural resource exports to total merchandise exports is associated with significantly slower per capita GDP growth. There are no statistically significant differences between the effects of point-source and diffuse resource exports.

Suggested Citation

  • Michael Bleaney & Håvard Halland, 2009. "The Resource Curse and Fiscal Policy Volatility," Discussion Papers 09/09, University of Nottingham, CREDIT.
    • Handle: RePEc:not:notcre:09/09
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    Cited by:

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