Skip to main content
×
×
Home

Can More Be Less? An Experimental Test of the Resource Curse

  • Omar Al-Ubaydli (a1), Kevin McCabe (a2) and Peter Twieg (a3)
Abstract

Several scholars have argued that abundant natural resources can be harmful to economic performance under bad institutions and helpful when institutions are good. These arguments have either been theoretical or based on naturally occurring variation in natural resource wealth. We test this theory by using a laboratory experiment to reap the benefits of randomized control. We conduct this experiment in a virtual world (Second Life™) to make institutions more visceral. We find support for the theory.

Copyright
References
Hide All
Acemoglu, D., Johnson, S. and Robinson, J. 2001. The Colonial Origins of Comparative Development: An Empirical Investigation. American Economic Review 91: 13691401.
Acemoglu, D. and Robinson, J. 2006. Economic Origins of Dictatorship and Democracy. New York: Cambridge University Press.
Acemoglu, D., Verdierand, T., Robinson, J. 2004. Kleptocracy and Divide-and-Rule: A Model of Personal Rule. Journal of the European Economic Association 2: 162–92.
Alexeev, M. and Conrad, R. 2009. The Elusive Curse of Oil. Review of Economics and Statistics 91: 586–98.
Al-Ubaydli, O. 2011. Natural Resources and the Tradeoff Between Authoritarianism and Development. Journal of Economic Behavior and Organization 81 (1): 137–52.
Andersen, S. and Aslaksen, J. 2008. Constitutions and the Resource Curse. Journal of Development Economics 87: 227–46.
Atlas, S. and Putterman, L. 2011. Trust Among the Avatars: A Virtual World Experiment, with and Without Textual and Visual Cues. Southern Economic Journal, Forthcoming.
Auty, R. 2001. Resource Abundance and Economic Development. Oxford World Institute for Development Economics Research, Oxford University Press.
Banerjee, A. and Duflo, E. 2009. The Experimental Approach to Development Economics. Annual Review of Economics 1: 151–78.
Bateson, M., Nettle, D. and Roberts, G. 2006. Cues of Being Watched Enhance Cooperation in a Real-World Setting. Biology Letters 2: 412–14.
Baye, M., Kovenock, D. and De Vries, C. 1994. The Solution to the Tullock Rent-Seeking Game When R > 2: Mixed-Strategy Equilibria and Mean Dissipation Rates. Public Choice 81: 363–80.
Bente, G., Rüggenberg, S., Krämer, N., and Eschenburg, F. 2008. Avatar-Mediated Networking: Increasing Social Presence and Interpersonal Trust in Net-Based Collaborations. Human Communication Research 34: 287318.
Blume, A. and Ortmann, A. 2007. The Effects of Costless Pre-Play Communication: Experimental Evidence from Games with Pareto-Ranked Equilibria. Journal of Economic Theory 132: 274–90.
Brandts, J. and Cooper, D. 2005. It's What You Say Not What You Play. Working Paper, Case Western University.
Bulte, E. and Damania, R. 2008. Resources for Sale: Corruption, Democracy and the Natural Resource Curse. The B.E. Journal of Economic Analysis and Policy 8: article 5.
Burton, A. and Sefton, M. 2001. Risk, Pre-Play Communication and Equilibrium. Games and Economic Behavior 46: 2340.
Charness, G. and Gneezy, U. 2008. What's in a Name? Anonymity and Social Distance in Dictator and Ultimatum Games. Journal of Economic Behavior and Organization 68: 2935.
Charness, G. and Grosskopf, B. 2004. What Makes Cheap Talk Effective? Experimental Evidence. Economics Letters 83: 383–89.
Charness, G., Haruvy, E. and Sonsino, D. 2007. Social Distance and Reciprocity: An Internet Experiment. Journal of Economic Behavior and Organization 63: 88103.
Chesney, T., Chuah, S. and Hoffmann, R. 2009. Virtual World Experimentation: An Exploratory Study. Journal of Economic Behavior and Organization 72: 618–35.
Compton, R., Giedeman, D. and Johnson, N. 2010. Investing in Institutions. Economics and Politics 22: 419–45.
Cooper, R., DeJong, D., Forsythe, R. and Ross, T. 1992. Communication in Coordination Games. Quarterly Journal of Economics 107: 739–71.
Duffy, J. and Feltovich, N. 2002. Do Actions Speak Louder Than Words? An Experimental Comparison of Observation and Cheap Talk. Games and Economic Behavior 39: 127.
Engerman, S. and Sokoloff, K. 1997. Factor Endowments, Institutions and Differential Paths of Growth Among New World Economies. In How Latin America Fell Behind, ed. Haber, S.. Stanford, CA: Stanford University Press, 260306.
Fielder, M., Haruvy, E. and Li, S. 2011. Social Distance in a Virtual World Experiment. Games and Economic Behavior 72 (2): 400–26.
Fischbacher, U. 2007. z-Tree: Zurich Toolbox for Ready-Made Economic Experiments. Experimental Economics 10: 171–78.
Frankel, J. 2010. The Natural Resource Curse: A Survey. NBER Working Paper 15863.
Greif, A. 2006. Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge: Cambridge University Press.
Hodler, R. 2006. The Curse of Natural Resources in Fractionalized Countries. European Economic Review 50: 1367–86.
Kang, S., Watt, J. and Ala, S. 2008. Communicators’ Perceptions of Social Presence as a Function of Avatar Realism in Small Display Mobile Communication Devices. In Proceedings of the 41st Hawaii International Conference on System Sciences. Washington, DC: IEEE Computer Society, 110.
Kimbrough, E., Smith, V. and Wilson, B. 2008. Historical Property Rights, Sociality, and the Emergence of Interpersonal Exchange in Long-Distance Trade. American Economic Review 98: 1009–39.
Knapp, G. and Murphy, J. 2010. Voluntary Approaches to Transitioning from Competitive Fisheries to Rights-Based Management: Bringing the Field Into the Lab. Agricultural and Resource Economics Review 39: 245–61.
Lakin, J., Jefferis, V., Cheng, C. and Chartrand, T. 2003. The Chameleon Effect as Social Glue: Evidence for the Evolutionary Significance of Nonconscious Mimicry. Journal of Nonverbal Behavior 27: 145–62.
Leibbrandt, A. and Lynham, J. 2013. Does the Resource Curse Exist? An Experimental Test. Working Paper, Monash University.
McCabe, K., Twieg, P. and Weel, J. 2011. Investigating the Endogenous Emergence of Social Networks and Trade: A Virtual Worlds Experiment. Working Paper, George Mason University.
Mehlum, H., Moene, K. and Torvik, R. 2006. Institutions and the Resource Curse. Economic Journal 116: 120.
Morgan, J. and Sefton, M. 2000. Funding Public Goods with Lotteries: Experimental Evidence. Review of Economic Studies 67: 785810.
North, D. 1990. Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press.
North, D., Wallis, J. and Weingast, B. 2009. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press.
Nowak, K., Watt, J., and Walther, J. 2005. The Influence of Synchrony and Sensory Modality on the Person Perception Process in Computer-Mediated Groups. Journal of Computer-Mediated Communication 10: article 3.
Nti, K. 1997. Comparative Statistics of Contests and Rent-Seeking Games. International Economic Review 38: 4359.
Olsson, O. 2006. Diamonds Are a Rebel's Best Friend. World Economy 29: 1133–50.
Olsson, O. 2007. Conflict Diamonds. Journal of Development Economics 82: 267–86.
Ostrom, E. 2000. Collective Action and the Evolution of Social Norms. Journal of Economic Perspectives 14: 137–58.
Potters, J., de Vries, C., and van Winden, F. 1998. An Experimental Examination of Rational Rent-Seeking. European Journal of Political Economy 14: 783800.
Robinson, J., Torvikand, R. and Verdier, T. 2005. Political Foundations of the Resource Curse. Journal of Development Economics 79: 447–68.
Ross, M. 2001. Does Oil Hinder Democracy? World Politics 53: 325–61.
Sachs, J. and Warner, A. 1995. Natural Resource Abundance and Economic Growth. NBER Working Paper 5398.
Torvik, R. 2002. Natural Resources, Rent-Seeking and Welfare. Journal of Development Economics 67: 455–70.
Tullock, G. 1980. Efficient Rent Seeking. In Toward a Theory of the Rent-Seeking Society, eds. Buchanan, J., Tollison, R., and Tullock, G.. College Station, TX: Texas A&M University Press, 97112.
Tsui, K. 2009. More Oil, Less Democracy? Theory and Evidence from Crude Oil Discoveries. Economic Journal, Forthcoming.
Vicente, P. 2010. Does Oil Corrupt? Evidence from a Natural Experiment in West Africa. Journal of Development Economics 92: 2838.
Walker, J., Gardner, R. and Ostrom, E. 1990. Rent Dissipation in a Limited-Access Common-Pool Resource: Experimental Evidence. Journal of Environmental Economics and Management 19: 203–11.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Experimental Political Science
  • ISSN: 2052-2630
  • EISSN: 2052-2649
  • URL: /core/journals/journal-of-experimental-political-science
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords

Type Description Title
PDF
Supplementary materials

Al-Ubaydli Supplementary Material
Al-Ubaydli Supplementary Material

 PDF (1.1 MB)
1.1 MB

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed