Abstract

Employing panel data from 18 countries in the Middle East and Africa over 7 periods, this study investigates the resource curse and its causes through two fixed-effects models. We empirically test the relationship between political transparency on economic growth in resource-rich developing countries. This study employs two measures of natural resource abundance to discover the effects that point-resource exports and diffuse-resource exports have on economic growth, as well as controlling for institutional quality. In theory, these two types of natural resources have different impacts on growth. The results of the regressions indicate that when first controlling for institutional quality, there are no signs of a resource curse or blessing for both resource variables. However, when controlling for both institutional quality and transparency, we find that transparency is strongly positive and significant in explaining economic growth, as well as making diffuse resource exports have a positive and statistically significant impact on economic growth. Therefore, the combination of institutional quality and transparency can help explain how natural resources may be beneficial for growth under the right policies. Foreign aid revenue and trade openness are found to be beneficial for growth, while population, human capital, government consumption, and investment negatively impact growth. We also find evidence that more autocratic forms of government are more beneficial for growth than democratic forms, as well as evidence for the convergence theory.

Advisor

Sirbu, Anca

Second Advisor

Sell, John

Department

Business Economics

Disciplines

Other Business

Keywords

institutional quality, transparency, economic growth

Publication Date

2014

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2014 Ian Reid