NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Addressing the Natural Resource Curse: An Illustration from Nigeria

Xavier Sala-i-Martin, Arvind Subramanian

NBER Working Paper No. 9804
Issued in June 2003
NBER Program(s):   EFG

Some natural resources -- oil and minerals in particular -- exert a negative and nonlinear impact on growth via their deleterious impact on institutional quality. We show this result to be very robust. The Nigerian experience provides telling confirmation of this aspect of natural resources. Waste and corruption from oil rather than Dutch disease has been responsible for its poor long run economic performance. We propose a solution for addressing this resource curse which involves directly distributing the oil revenues to the public. Even with all the difficulties of corruption and inefficiency that will no doubt plague its actual implementation, our proposal will, at the least, be vastly superior to the status quo. At best, however, it could fundamentally improve the quality of public institutions and, as a result, transform economics and politics in Nigeria.

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Document Object Identifier (DOI): 10.3386/w9804

Published: Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.

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