Cookies?
Library Header Image
LSE Research Online LSE Library Services

Corruption, the resource curse and genuine saving

Dietz, Simon, Neumayer, Eric and de Soysa, Indra (2007) Corruption, the resource curse and genuine saving. Environment and Development Economics, 12 (1). pp. 33-53. ISSN 1355-770X

[img]
Preview
PDF
Download (136Kb) | Preview

Abstract

Genuine saving measures net investment in produced, natural and human capital. It is a necessary condition for weak sustainable development that genuine saving not be persistently negative. However, according to data provided by the World Bank, resource-rich countries are systematically failing to meet this condition. Alongside the well-known resource curse on economic growth, resource abundance might have a negative effect on genuine saving. In fact, the two are closely related, as future consumption growth is limited by insufficient genuine saving now. In this paper, we apply the most convincing conclusion from the literature on economic growth – that it is institutional failure that depresses growth – to data on genuine saving. We regress gross and genuine saving on three indicators of institutional quality in interaction with an indicator of resource abundance. The indicators of institutional quality are corruption, bureaucratic quality and the rule of law. We find that reducing corruption has a positive impact on genuine saving in interaction with resource abundance. That is, the negative effect of resource abundance on genuine saving is reduced as corruption is reduced.

Item Type: Article
Official URL: http://uk.cambridge.org/journals/ede/
Additional Information: © 2007 Cambridge University Press
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Sets: Research centres and groups > LSE Environment: Centre for Environmental Policy and Governance (CEPG)
Departments > Geography and Environment
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 31 Jan 2008
URL: http://eprints.lse.ac.uk/973/

Actions (login required)

Record administration - authorised staff only Record administration - authorised staff only

Downloads

Downloads per month over past year

View more statistics