## Addressing the Natural Resource Curse: An Illustration From Nigeria

_IMF Working Papers, July 1, 2003_

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## Bibliographic details
- Authors: Arvind Subramanian, Xavier Sala-i-Martin
- Published: July 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856064.001

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### Major findings on natural resources and growth
- Some natural resources—oil and minerals in particular—exert a negative and nonlinear impact on growth via their deleterious impact on institutional quality.
- This negative and nonlinear impact is shown to be very robust.
- The Nigerian experience provides telling confirmation: waste and poor institutional quality stemming from oil appear to have been primarily responsible for Nigeria's poor long-run economic performance.
- The analysis links natural-resource abundance (especially oil) to weakened institutions, which in turn depresses long-run growth performance.

### Policy proposal and recommendations
- The paper proposes a solution that involves directly distributing the oil revenues to the public.
- Rationale: direct distribution would be vastly superior to the status quo and, at best, could fundamentally improve the quality of public institutions and durably raise long-run growth performance.
- Caveat: the authors acknowledge that many difficulties will no doubt plague the actual implementation of direct distribution, but emphasize that even imperfect implementation would outperform current arrangements.

### Scope, robustness, and applicability
- The core result—negative nonlinear effects of oil and minerals on growth through institutional channels—is presented as robust.
- Nigeria is used as an illustrative and confirming case; implications extend to concerns about the natural resource curse more broadly (including Dutch disease and resource-export dynamics).
- The study situates its findings within subjects including Commodities, Environment, Natural resources, Non-renewable resources, Oil, Oil prices, Oil, gas and mining taxes, Prices, Taxes.

### Keywords and thematic emphasis
- Keywords highlighted in the content include: corroborating government figures, dependent variable, Dutch disease, East Asia, exchange rate, gas and mining taxes, growth, growth performance, institutions, natural resource, natural resource curse, natural resource variable, natural resource-ownership, natural resources, Nigeria, Nigeria dummy, Non-renewable resources, oil, Oil, Oil prices, oil resource, oil revenue, physical capital, private sector, resource export, status quo, Sub-Saharan Africa, WP.

*IMF Working Paper No. 2003/139; Pages: 47; Volume: 2003; Issue: 139; DOI: https://doi.org/10.5089/9781451856064.001*

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