Contrary to conventional theory, a growing body of evidence suggests that economies with abundant natural resources perform badly in terms of economic growth relative to their resource poor counterparts—the so-called resource curse hypothesis. However, this general hypothesis is not robust. It clearly fails to account for the differing experiences of resource abundant economies. For instance, the theory, applied generally, offers no explanation as to why economies like Botswana and Norway have exceptional growth while Saudi Arabia and Nigeria have stagnated. Prompted by these experiences, the thesis investigates the circumstances under which the curse is more or less likely to exist. In particular, the thesis finds evidence that the major reason for the diverging experiences is the differences in the quality of institutions across countries. The thesis tests the hypothesis that the effect of resources on growth is conditional on the type and quality of institutions, by further building on Boschini, Pettersson, and Roine’s (2007) and Mehlum, Moene, and Torvik’s (2006b) influential works on the role of institutions in mitigating the resource curse. Advances are made by: (a) using a panel of up to 53 countries with different levels of development, institutional quality and natural resource abundance over the period 1984-2003; (b) applying a two-step system Generalised Method of Moments (GMM) estimation that accounts for biases associated with omitted variables, endogeneity and unobserved heterogeneity that potentially affect existing cross-country Ordinary Least Squares (OLS) growth results; (c) supplementing results of the commonly used International Country Risk Guide (ICRG) institutional performance indicators with those of institutional design indicators–that is, highlighting the role of electoral rules and form of government; (d) using an institutional quality measure that is more related to financial institutions than just economic or political institutions; (e) using a resource abundance indicator that focuses on non-renewable resources alone rather than the ones commonly used in the literature that include renewable resources, which are inappropriate. The key hypothesis that natural resource economies are not destined to be cursed if they have good institutions is confirmed by the empirical results of the thesis. Specifically, the results suggest that (a) adopting a democratic regime is better than a non-democratic one, in terms of generating growth from resource abundance (b) the electoral rules that a country adopts matter, i.e. having a democratic proportional rather than a democratic majority regime increases the growth benefits of resource abundance (c) as far as the form of government adopted is concerned, a democratic parliamentary rather than a democratic presidential regime generates more economic growth from its abundant natural resource (d) a well functioning banking sector induces more (resource abundant generated) growth and capital accumulation. Therefore, the lessons for policy makers who struggle to overcome the impediments to economic development that potentially accompany the “curse of resource abundance” are the need to develop and maintain better institutions and adopt improved management strategies of the financial proceeds forthcoming from such abundance.

Typescript. Includes vita and abstract. Includes bibliographical references (leaves 98-107). Also available online in Scholars' Bank.

The discovery of commercial quantities of oil and gas resources in the Gulf of Guinea and parts of East Africa has once again raised expectations that sustained development will emerge in one of the world’s poorest regions. At the same time there is great concern that Africa’s new resource-rich countries will succumb to the so-called resource curse phenomenon because of their generally weak governance institutions. In response to this challenge, the international community has intensified its efforts to promote good governance mechanisms in such countries, focused on transparency and accountability, and informed by a dominant institutionalist literature which argues that the differences in resource governance outcomes can be explained by the differences in institutional design and performance. A recent turn to politics in both the development and resource curse literature has begun to move the research agenda beyond the primacy of institutions to look at the politics that underpin the emergence and performance of institutions. This is particularly evidenced in the emerging literature on political settlements that emphasise the distribution of power amongst social groups in society and how these power relations shape institutions and in turn development outcomes. This new political lens is helping to deepen analysis of how and why resource-rich countries prevent or succumb to the resource curse and provides an opportunity to interrogate the inclusive development prospects of Africa’s new oil-rich countries. In this thesis, I apply and extend the political settlement approaches by incorporating ideational and spatial dynamics, to analyse the prospect of inclusive development outcomes in Ghana where oil and gas resources were discovered in 2007. Focusing on the power relations between and amongst national elites and elites in the oil producing Western Region, I interrogate the ways in which the spatial dynamics of Ghana’s prevailing competitive clientelist political settlement is shaping the governance of the oil sector, and the implications it has for inclusive development. I find that at the onset of a resource boom, the dynamics of local politics, and the dominant incentives and ideas generated by the political settlement has strongly shaped the content and enforcement of Ghana’s foundation institutions to manage the oil sector, in ways that reinforces the pre-oil settlement around the governance of natural resources and undermines the long-term prospects for inclusive development. At the same time, the oil boom has also been accompanied by the increased use of formal institutions and suggests that Ghana may be moving away from personalised to more programmatic forms of clientelism.

As oil bearing country, the issue of development in Nigeria has been a complex one that has attracted attention of both the government and scholars because oil politics appears to shape resource management and the development process. While academic focus has been on the analysis of national development, there is a paucity of academic studies on the internal dynamics at the regional level that shape the development process. This study therefore aims to: “examine the effect of oil resources on Nigeria’s development and the South-South compared with the situation in the South-West”, with an explicit focus on the complex nexus between oil, politics and regional development in Nigeria. The thesis adopts both methodological and theoretical triangulation to generate data to test the main and supporting hypothesis adopted for the study: “the oil industry has had an adverse impact on the development of Nigeria, and, in particular, the Niger Delta region in which it is concentrated”. In so doing, it explores the failure of oil politics to mix effectively to engender both national and regional development; leading to a regional development disparity. The study concludes that oil wealth failed to fuel development in Nigeria but instead, led to leadership failure. This failure is particularly found to have given vent to the negative impact of oil wealth on elite behaviour that is shaped by corruption, made worse by a dis-functional federal system where those with links major ethnic groups, get resource allocation and development advantage. The study consequently recommends that elite induced oil politics and attendant corruption, be tackled to pave way for both national and regional development in Nigeria. The study also recommend replication of this study in a larger scale in other oil bearing developing nations to further explore the relationship between management of resource wealth and regional development.

That countries with high natural resource abundance should experience slower economic growth than those with low resource abundance seems contrary to what would be expected, considering the developmental head-start such resources afford. Yet Sachs and Warner (1997) found that economies with a high share of natural resource exports in national income in 1970 tended to experience slower economic growth in the two decades that followed. This finding, that natural resources are a “curse” rather than a blessing, has become generally accepted. This thesis sought to test whether the conclusion drawn from their data – that higher natural resource abundance leads to slower economic growth – is still correct. It sought to test their findings first by correcting for their use of resource intensity (natural resources share of exports) as a proxy for abundance. Using measures of resource abundance for 1995 as a proxy for abundance in previous decades, it was found that higher resource abundance was not associated with lower economic growth in the 1970s and 1980s. This finding is contrary to that of Sachs and Warner (1997, 2001). Secondly, this thesis tested whether the natural resource curse effect was still present for the period 1995–2010. This was done by observing the effect of both resource abundance and resource intensity on economic growth during 1995–2010. In both cases no resource curse effect was found, for this more recent period. The resource curse had disappeared regardless of whether one uses Sachs and Warner’s (1997, 2001) measure of resource intensity or a measure of resource abundance. Natural resources should therefore no longer be considered a “curse”. In explaining the difference for the impact of resource intensity between the 1970-90 period measured by Sachs and Warner (1997, 2001) and the more recent period 1995-2010 it was found that the Dutch Disease effect has decreased significantly since the 1970s and 1980s. This could partly explain why the resource curse has disappeared when measured in terms of resource intensity. Thus it was concluded that the natural resource curse existed in the period 1970-90 only when measured in terms of resource intensity but not when measured relative to resource abundance. The negative effects of natural resources on economic growth have disappeared in terms of both resource intensity and resource abundance in the more recent time period.

Natural wealth can either be an advantage for a country's economy or its curse. This thesis applies theories, which explore relationship between natural resources abundance and economic development of the country on a recent situation in Bolivia. The relationship between local natural gas and continuous poverty is analyzed within the resource curse theory and its causes. The analysis concentrates mainly on the Dutch disease theory, government's economic policy, investment and social environment in the country. Finally, the aim of this work is to answer the question whether natural gas means a curse for Bolivia and to identify its main causes. In addition, consequences of the onset of president Morales and the new nationalization policy are analyzed in detail.

There is a big debate among economists, why are the resource-rich economies growing slower than resource-poor economies? Which is making this puzzle more difficult, there are two groups of resources-rich abundance countries one group grow more than other ones. For instance, the Arabic Gulf, Nigeria, and Venezuela are growing slower than Botswanan, Norway, and Australia, but both groups are resources-rich countries. Is it the resources curse scenario? Or is it weak institutions? To study this puzzle, I have observed two groups of studies. The first group of old studies claim that the problem of low growth in resources-rich economics comes from the scenario of Dutch disease, but the second group or more recent studies strongly refuse the claim by the first group. They have debated that the problem comes from poor institutional quality. We totally agree with both groups, yet we have another scenario. The resources-rich countries suffer from Dutch diseases problem and from poor quality of institutions. We strongly criticize the most significant a series of studies by Sachs and Warner (1995, 1997a,1997b, 2001). They have debated that the Dutch Disease scenario is a possible mechanism of the resource curse, which is the labor factor and capital factor move from the manufacturing and service sectors to the natural resources sector. Thus, the negative effect of natural resources on economic growth is direct effect. We argue that there is a positive relationship between most types of natural resources (oil) and economic growth. We claim also this a positive relationship holds true even after controlling for significant variables found to be for economic growth. We are not only debating that the main symptoms of the resources curse come from the weakness of institutional quality, but also come from Dutch disease scenario. We see that the indirect effect of natural resources on economic growth. To prove this association, we have used multiple institutions and resources. However, we set up three chapters: The first chapter discusses how natural resources (oil rents) impact institutional quality (control of corruption) in the Middle East and North Africa (MENA). We discuss that is there any possibility of interaction terms between oil rents and rule of law from one side, and between oil rents and democracy from another side to avoid high corruption in MENA countries? Our findings confirm: First, the oil rents can highly feed corruption. Second, our estimates confirm that the relationship between oil rents and corruption depends on the quality of institutions (rule of law), which oil rents avoid to feed corruption unless the mean of quality of law role is (0.33). Furthermore, our findings suggest that the autocracy is better policy in the region. In the second chapter, to approach to our goal, the main symptoms of the resource curse phenomenon in MENA. The findings confirm that the economic growth in MENA is greatly and positively influence by oil rents, but we have blamed poor institutions leading to the phenomenon of resources curse. When the weakness of institutions reaches to certain limits, oil rents will start to create a negative impact on growth. This result seems to confirm the theory of the natural resource curse and to confirm that resources-rich countries are associated with poor institutions. Moreover, the interaction terms between diversification and oil rent can promote economic growth. In the third chapter, we discuss how the interaction terms between various types of natural resources, petroleum, natural coal, and coal, and political stability influence economic growth? The findings have diagnosed there are dissimilar effects by petroleum, natural gas, and coal on economic growth.

Submitted to the University of the Witwatersrand’s Faculty of Humanities in partial fulfilment of the degree of Master of Arts in International Relations International Relations Department University of the Witwatersrand March 2015 / Extractive natural resources have always been associated with negative outcomes in sub- Saharan countries. However, it is essential to investigate the extent to which domestic political conditions influence ownership structures, which may or may not subsequently result in adverse outcomes. Through a comparative analysis between the cases of Angola and Botswana, this study finds that, political contestation influences ownership models as hypothesized to an extent. In Angola, the post-independence civil war pitting the ruling MPLA against UNITA resulted in Sonangol being managed as a wholly owned state enterprise, albeit serving the interests of the MPLA elite instead of broad-based developmental interests. In Botswana, however, Debswana was managed as a public-private entity located within a democratic political system, and this ownership structure was more a result of rational policy planning than political contestation. Nevertheless, the cases’ history of colonial rule and political institutions established upon the attainment of political independence are substantially influential factors as well. Non-settler colonialism and non-militarized political transitions to independence facilitated the growth of “organic” political and economic institutions and public-private ownership structures in Botswana, while settler colonialism and pre-independence militarization influenced the growth of centralized post-colonial state structures internal strife in Angola. The timing of resource extraction was also important, with pre-independence oil extraction influencing militarized rivalry in Angola, while postindependence extraction of diamonds in Botswana was a causal factor in the development of strong state institutions. External factors, particularly the Cold War influenced militarised outcomes in Angola, while the nature of the global diamond market had a contributory factor to the establishment of the public-private ownership model in Botswana.

This study investigated the effect the price of oil has on enabling political establishments to maintain their presence within the business environment. The study consists of three different case studies with each of the states (Saudi Arabia, Iran and the United Arab Emirates) being chosen based upon their level of state involvement within the business community. Each case study investigated whether the price of oil had any effect on influencing the amount of political involvement within the business community, property rights or trade freedom. The findings for all three case studies suggest that the price of oil has little to no effect on determining the amount of influence the state possesses within the business environment. Based on the results of this investigation, recommendations were made to improve the United States relationship with each country. Additional analysis and recommendations were made concerning the future economic impact of Iraq relying solely on oil as its revenue source.

This dissertation consists of two essays on the topic of bidding in multi-unit common value auction. Essay one examines the role of capacity constraint on the auction results and bidding behavior. We consider a general case where bidders are unconstrained, and a second setting where bidders are capacity constrained. We document downward sloping demand curves for individual bidders. Bidders shade their bids by submitting quantity-price pairs and spreading their bids. The winner's curse is strong in the unconstrained treatment, but we find no evidence of the winner's curse when bidding constraints are imposed. Unconstrained bidders shade bids significantly more and their quantity-weighted prices are much lower than those in the constrained treatment. Interacting with the information structure, the capacity constraint has a significant impact on the auction results including the market clearing price, market efficiency, and the degree of market concentration. We provide evidence that efficient price discovery in multi-unit auctions with diverse information is possible, but careful attention to auction design will make this outcome more likely. Essay two examines how the introduction of a noncompetitive bidding option affects outcomes in a multi-unit uniform-price auction. The experimental design incorporates many of the characteristics of the markets that pertain to the issuance of new equity securities. Important features of the bidding environment include endogenous bidder entry, costly information acquisition, bidders that differ by capacity constraint, and substantial uncertainty with respect to the intrinsic value. We use a standard uniform-price auction as our baseline setting where only competitive bids are accepted. Our results show that introducing the noncompetitive bidding option improves auction performance by increasing revenue and reducing price error. Underpricing is found in both treatments, but is less severe in the presence of the noncompetitive bidding option. The incorporation of this option significantly increases both the small bidder participation rate and allocation, and reduces the incentive for small bidders to free ride by submitting extremely high bids. Under both treatments, information acquisition increases large bidders' profits but proves unprofitable for small bidders, and pricing accuracy is increasing in the rate of information acquisition.