The evolution of the natural resource curse thesis: A critical literature survey

This paper surveys the natural resource curse. We review the mechanisms through which resource wealth might slow economic growth, and the empirical studies that test for an effect overall, or on factors associated with growth. We include more recent studies suggesting the resource curse reflects only empirical misspecification. After reflecting on this conflicting evidence, and the findings of other recent surveys, we argue the evidence that resource dependence negatively affects growth remains convincing, particularly working through factors closely associated with growth in developing countries. Recent contrarian studies demonstrate that future research should better address endogeneity of dependence measures, and expand the years of study and range of empirical methodologies used. •We chart the chronological evolution of the resource curse theories and empirics.•We provide even balance between economic and political mechanisms and their interaction.•We give extensive coverage to recent papers questioning the existence of a resource curse.•We include a ‘survey of the surveys’ that identify the differing emphases and conclusions.