Natural Resource Abundance and Its
Impact on Development Prospects
(Supervisor: Fatma Doğruel)
The paradox that natural resources give rise to ill effects in most
of the economies endowed with them has been proven for many
countries when economic growth and other macroeconomic outcomes are
considered. However, how resources affect human development and
social well-being in a sustainability context has not attracted
enough attention yet.
This study contributes to the literature on the links between human
development and natural resources distinguishing between types of
resources. Then, a panel of countries are examined in terms of the
effects of their resources on genuine saving, which is a
sustainability indicator that takes into account the welfare of
future generations incorporating the changes in different kinds of
capital. The main finding is that exportation of agricultural raw
materials is associated with significant deterioration in human
development, while extractive resource exports, such as energy and
minerals, imply severe negative outcomes for sustainable savings.
The different effects of resources are explained by various
institutional frameworks such as political regimes, constitutional
roots, colonial origins and quality of governance.
Finally, the scope of the thesis is extended to handle a two-country
examination approach in order to demonstrate how an oil-rich economy
can develop in comparison to a similar economy which lacks this
resource. To that end, the development path of Norway before and
after oil is examined with respect to that of Sweden. The two
countries, which followed almost identical paths until the 1970s,
are found to be significantly diverging in terms of per capita
income after Norway found oil.