THE DIFFERENT IMPACTS OF DIFFERENT TYPES OF NATURAL RESOURCES ON POLITICAL INSTITUTIONS IN DEVELOPING COUNTRIES

Rents  generated  by  natural  resources  are  usually  thought  to  weaken  the  quality  of  institutions, particularly in developing countries. Our hypothesis is that this effect may differ depending on the types  of  natural  resources  characterized  by  their  different  degree  of appropriability. We test this hypothesis using panel data covering 90 developing countries for  the period  1970-2010. We  find that  total  rents  weaken  the  quality  of  institutions.sans-titre

However, while oil rents have a significant negative effect, forest and mineral rents do not, after  controlling  for  the other  relevant  determinants  of  institutional  quality,  institutional  persistence, neighbor effect, and endogeneity of rents.

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