In Search of the Missing Resource Curse

In "In Search of the Missing Resource Curse," Lederman and Maloney critically tackle the problem of whether the natural resource curse exists. The idea that countries rich in natural resources are "doomed" by the existence of their lucky endowment has been in the minds of economists for more than 200 years. Perhaps the most important empirical findings supporting the natural resource curse are the seminal contributions by Jeffrey Sachs and Andrew Warner, who consistently find that countries rich in natural resources tend to grow more slowly than their unendowed counterparts. Many have questioned this view, although the two most prominent critics have been Lederman and Maloney. In this paper, they argue that the channels through which the natural resource curse is most commonly thought to operate are not empirically relevant and most of them are theoretically questionable. The paper builds on earlier work to illustrate that the existing stylized fact of a curse is inconclusive at best. The authors use a better measure for resource intensity than what previous researchers have used and find no evidence of a curse. This is a thought-provoking and carefully crafted paper that convincingly argues against one of the strongest views supported by the conventional wisdom.