Economies well endowed with natural resources relative to other factors of production have grown slower than other economies over the long term. In reviewing possible explanations for this, the article finds unconvincing such common suggestions as declining terms of trade and rising restrictions to primary product markets abroad. It suggests the most likely reason is these countries' own distortionary policy regimes. Recent reforms in some resource-rich economies are already yielding growth dividends. The article also examines the impact of the greening of world preferences and politics on the prospects for resource-abundant economics.
|Australian Journal of Agricultural and Resource Economics
|Published - 1998