Seminar Abstract on resource curse
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The seminar titled 'Curse of Natural Resources: Theory and Evidences' discusses the economic issues related to natural resource abundance and the 'resource curse' phenomenon, where countries fail to benefit economically from their resources. Specifically, it explores the applicability of the resource curse thesis in India, revealing that the resource sector negatively impacts state domestic product per capita despite controlling for various factors. The document concludes by suggesting measures to avoid the resource curse, such as diversification and sound policy frameworks.
Seminar Abstract on resource curse
- 1. Name: Gourav Kumar Vani Seminar leaders: Dr. P. Venkatesh Chairman: Dr. Amit Kar and Aditya K.S. Roll no: 10678 Date: 28-01-2016, Time: 2.30 pm Seminar Title: “Curse of Natural Resources: Theory and Evidences” Abstract Economies around the world differ in their natural resource deposits. Some of these countries have managed to utilize their natural resource abundance to their economic advantage while others did import resources to fuel their economic growth. However, some set of countries could not derive economic advantage out of natural resource abundance like Congo, Sierra Leone etc. This seminar focuses on the economic problems arising out of natural resource abundance and excessive dependence on it. The situation of having bad or worse economic outcomes for economy due to resource abundance is referred to as resource curse. There are various theories existing in favour and against the resource curse thesis. Staple thesis, advocated by Canadian economists Innis and Mackintosh, pointed that staples (resource with minimal or no processing) can be exported to advance economically. Dutch disease models and political economy models are supporter of resource curse thesis. Dutch disease models explained the phenomenon on purely on economic grounds while political economy models tended to focus on institutional aspects explaining resource curse. India is a country blessed with natural resources. So it is obvious to expect resource curse thesis applicability on India too. To examine the thesis few attempts were made although research output not without caveats. To overcome the barrier, a study was conducted to examine the effect of resource sector (agriculture, forestry, fishery and mining & quarrying) on growth rates of real net state domestic product per capita for period stretching from 2000-01 to 2010-11. Even after controlling for infant mortality, forest cover, initial domestic product, urbanization, coastal length, SC/ST population, literacy rate and work force, resource sector was found to have negative effect on state domestic product. This confirms the resource curse hypothesis for Indian states. Measures suggested for avoiding resource curse are namely, diversification, resource price volatility reduction measures, adoption of devices to share resource price risk, making institutions less grabber friendly, appropriate monetary and fiscal policy. References Frankel, J. A. (2010). The natural resource curse: a survey (No. w15836). National Bureau of Economic Research. Kolstad, I., & Wiig, A. (2009). It's the rents, stupid! The political economy of the resource curse. Energy Policy, 37(12), 5317- 5325. Mehlum, H., Moene, K., & Torvik, R. (2006). Cursed by resources or institutions?. The World Economy, 29(8), 1117-1131. Mehlum, H., Moene, K., & Torvik, R. (2006). Institutions and the resource curse. The economic journal, 116(508), 1-20. Robinson, J. A., Torvik, R., & Verdier, T. (2006). Political foundations of the resource curse. Journal of development Economics, 79(2), 447-468. Sachs, J. D., & Warner, A. M. (1997). Natural resource abundance and economic growth, NBER worker paper no. 5398 (updated) Sachs, J. D., & Warner, A. M. (1999). The big push, natural resource booms and growth. Journal of development economics, 59(1), 43-76. Division of Agricultural Economics ICAR- Indian Agricultural Research Institute, New Delhi