Journal Article

Addressing the Natural Resource Curse: An Illustration from Nigeria

Xavier Sala-i-Martin and Arvind Subramanian

in Journal of African Economies

Volume 22, issue 4, pages 570-615
Published in print August 2013 | ISSN: 0963-8024
Published online December 2012 | e-ISSN: 1464-3723 | DOI: https://dx.doi.org/10.1093/jae/ejs033
Addressing the Natural Resource Curse: An Illustration from Nigeria

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  • Economywide Country Studies
  • Agricultural, Environmental, and Natural Resource Economics
  • Economic Growth and Aggregate Productivity
  • Economic Development

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Some natural resources—oil and minerals in particular—exert a negative and non-linear impact on growth via their deleterious impact on institutional quality. We show this result to be very robust. The Nigerian experience provides telling confirmation of this aspect of natural resources. Waste and poor institutional quality stemming from oil appear to have been responsible for its poor long-run economic performance. We propose a solution for addressing this resource curse which involves directly distributing the oil revenues to the public. Even with all the difficulties that will, no doubt, plague its actual implementation, our proposal will, at the least, be vastly superior to the status quo. At best, however, it could fundamentally improve the quality of public institutions and, as a result, durably raise long-run growth performance.

Keywords: O10; O40; O50; O55; O57; Q00

Journal Article.  13662 words.  Illustrated.

Subjects: Economywide Country Studies ; Agricultural, Environmental, and Natural Resource Economics ; Economic Growth and Aggregate Productivity ; Economic Development

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