No. 11/2006
CONSTITUTIONS AND THE RESOURCE CURSE
Jørgen Juel Andersen
Silje Aslaksen
Abstract:
Recent advances in the political economy literature suggests that
constitutional arrangements determine a wide range of economic pol
icy outcomes. In particular, it is argued that different forms
of government (presidential versus parliamentary) induce more or less
'growth
promoting' policies. However, effects on long run growth have proved
harder to identify. We exploit the fact that natural resources are randomly
distributed to identify differences in the long-term performance
of economies with different constitutional forms. Existing theory
suggests that the presence of vast natural resources should affect
growth differently in countries with different constitutional
designs. Empirically we find strong support for this hypothesis - constitutions
indeed seem to matter for how natural resource abundance affects
long run growth. In fact, the form of government matters more
than democratic rule. We also find interaction effects of electoral
rules (majority
versus proportional voting) and resource abundance on growth, although
these effects are less clear-cut and less robust.
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