A puzzling piece of empirical evidence suggests that resource-abundant countries tend to grow slower than their resource-poor counterparts. We attempt to explain this phenomenon by developing a lobbying game in which rent seeking firms interact with corrupt governments. The presence or absence...

Empirical evidence suggests that governance quality is a key driver of economic growth and that, in turn, higher incomes might have a positive causal effect on the quality of governance. Such complementarity could invite virtuous cycles of development. Using a measure of corruption as our proxy...