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This study aims at increasing the authors’ understanding how and why the oil curse takes place.

The study uses a structural equation model (SEM) and stochastic frontier analysis (SFA) in order to underline the mechanism under which the oil curse operates.

The study shows that oil abundance could lead to inefficient resource allocation. This inefficiency is strongly correlated with a weak institutional setting which would lead to accumulated external debt and ultimately to poor economic performance.

The quality of institutions and governance plays a major role in defining government success in allocating public resources efficiently. In a weak institutional setting, characterized with lack of accountability oil rents can promote rent-seeking behavior of public agents; a type of behavior that promotes misallocation and waste of resources. This in turn undermines public finances and leads to external debt accumulation. Debt per se is not necessarily a bad thing, but it has a turning point beyond which it can be a source of economy for countries (particularly countries with limited diversified source of revenue and inefficient public sector). It is to note that the authors work does not refute the positive impact that the increase in oil value has on economic growth (e.g. Nusair, 2016). However, it reminds policy makers that in order to sustain this impact over long term, it is necessary to build a strong institutional framework that prevents inefficient use of resource allocation as it could result in rapid accumulation of debt over short period of time. The adoption of sovereign wealth funds (SWFs) by a number of oil rich countries has helped them to manage adverse oil shocks. Nonetheless, the effectiveness of these funds could be limited in a country whose institutions are not very strong. Characterized by a mediocre institutional setting, Algeria's sovereign fund, for example, has lost 67% of its reserves over just two years (2014–2015) before reaching the level zero by February 2017 following the drop of oil prices in 2015 (see Central Bank of Algeria, 2017). Also, the foreign exchange reserves of the country experienced a drop of more than 72% over a short period of time (2014–2020), leading to the resurgence of the idea of contracting external debt. Similarly, following the sharp drop in oil prices in 2015, the Saudi Arabia's external debt (% of GDP) has jumped by more than 150% over three years only, reaching a level of 28.85% in 2020 compared to a 10.62% in 2015 (https://Fred.stlouisfed.org/series/SAUDGDPGDPPT). The positive correlation of weak institutions with inefficiency can lead to fiscal policy procyclicality. Inefficient public spending tends to be procyclical compared to productive public spending (Makin, 2014). This procyclicality is apparent in developing countries, particularly those characterized by corrupted and weak institutional environment (Alesina et al., 2008; Frankel et al., 2013). This is conducive to output fluctuations where booms and busts are exacerbated (Frankel et al., 2013).

Originality of the study resides in the idea that external debt is an important element that could help to explain why oil curse could take place. The transmission mechanism that underpins the oil curse hypothesis is yet to be fully understood. In doing so, the paper, with the use of two sophisticated statistical techniques, reconciles between the concept of debt overhang and oil curse hypothesis. Similar research efforts are scant.

The “resource curse phenomenon” has received a lot of attention from researchers; however, there has not been any sound explanation to back this phenomenon since the main reason why natural resource should restrain economic growth instead of boosting economic growth remains unanswered. This paper contributes to literature on “resource curse hypothesis” by examining the role of government effectiveness in influencing the impact of gas resource rent on economic growth.

The study adopted the Cobb-Douglass production and incorporated gas resource rent, institutional quality (government effectiveness), inflation and exchange rate as additional variables that influences total output (gross domestic product). The author estimated the empirical form of the Cobb-Douglass production using autoregressive distributed lag model (ARDL) and Toda and Yamamoto (1995) as the main estimation strategies while other time series approaches were used as a robustness check.

The estimates from the ARDL short-run and the long-run dynamics suggest that the direct impact of gas resource rent on economic growth was positive but not statistically significant. At the same time, the interacting of gas resource rent and government effectiveness showed a positive and statistically significant effect of nearly 0.4123 and 0.8724 on economic growth in the long run and short run, respectively. The results from the Toda and Yamamoto (1995) also indicated that economic growth has a strong influence on gas resource rent while government effectiveness drives economic growth and not vice versa.

The findings from this study imply that government effectiveness plays a crucial role in averting the “resource curse phenomenon”. Hence, improving government effectiveness and efficiency through minimizing corruption among state institutions would be imperative in curbing the “resource curse phenomenon” in developing countries.

The influential role of government effectiveness on the relationship between gas resource rent on economic growth is examined.

This paper examines the limits of pragmatism in strategy formulation in the new, knowledge‐rich economy. By tracing the history of pragmatism in social and management thought, and assessing the commonalties and complementarities between a firm’s vision and mission, we explore the possibility and consequences of an intangible resource curse for firms pursuing strategies of incessant pragmatic growth in the expanding Web‐based domain. Ultimately, we posit a combined influence of market‐based governance and strategy simplification as an effective antidote to the executive intangible resource binging, which is sustainable as long as confidence and trust continue to be shared among the firm stakeholders.

The purpose of this paper is to explore the “resource curse” problem as a counter-example of creative performance and innovation by examining reliance on capital and physical resources, showing the gap between expectations and ex-post actual performance that became clearer under conditions of economic turmoil.

The analysis uses logistic regressions with dichotomous response and predictor variables on structured tables of count data, representing firm performance as an outcome of capital resources, physical resources and innovation where appropriate.

Key findings relevant to economic and business practice follow. First, a typical characteristic of successful Vietnamese firms in the transition period is their reliance on either capital resources or physical asset endowments. Second, poor performers exhibit evidence of over-reliance on both capital and physical assets. Third, firms that relied on both types of resources tended to downplay creative performance. Some evidence suggests that firms face more acute problem caused by the law of diminishing returns in troubled times. Fourth, the “innovation factor” has not been tapped as a source of economic growth.

This study has some limitations. The size of the survey sample is approximately 150 firms, while the potential sample of > 300 should be possible in the future. When the size increases, the research could be expanded to include further variables that will help investigate more deeply into the related issues and business implications. With regard to the implications of the study, the absence of innovations has made the notion of “resource curse” identical to “destructive creation” implemented by ex-ante resource-rich firms, and worsened the problem of resource misallocation in transition turmoil. The Vietnamese corporate sector's addiction to resources may contribute to economic deterioration, through a downward spiral of lower efficiency leading to consumption of more resources.

Insights obtained from this study could save transition economies' resources which have almost always been considered sine qua non before any critical major policymaking, while this is not necessarily true, and in many cases, even counterproductive.

Original data set on Vietnam stock market are collected, processed, prepared and used by the authors. Original design by the authors for regression equations with dichotomous predictor variables: dependence on endowed physical assets, reliance on capital resources and significant signs of creative performance/innovations. Original idea of viewing “resource curse” as absence of innovation and due to uncreative “destructive creation” of poor-performing commercial operations by resource-rich firms is used in the paper. We have searched the literature in business research and found that the empirical results have not been previously reported.

The aim of this paper is to examine development failure in Myanmar and explore alternative ways forward.

This research uses a variety of quantitative and qualitative data drawn from sources including newspaper and media accounts from inside and outside Myanmar, reports from NGOs and field observations. The data are analysed using a framework developed by combining the theoretical perspectives of the resource curse and governmentality.

Evidence of developmental failure in Myanmar is found. The nation is in an economic, social and political mess due to the actions of an incompetent and corrupt robber regime that has misused and misappropriated much of the wealth being produced from the nation's large mineral and energy reserves. Action by the international community has so far proved ineffective in improving the situation.

The main limitation of this paper is the difficulty in obtaining accurate and reliable official economic and social indicators. However, it does illustrate the value of combining the resource curse thesis and governmentality for understanding development failure.

This research has practical implications in that by illustrating the unsustainable nature of the “grabber governmentality” and providing an alternative “producer governmentality” it is clear that even the most authoritarian regimes are susceptible to change.

The resource curse thesis and governmentality have so far not been used together in the analysis of development. In this paper these concepts provide a way to critically examine the association between resource richness, poor governance and development failure.

The paper aims to assess the institutional readiness of Ghana prior to and after the production of her first oil. The paper also assesses the influence of politics in directing the appropriate use of the oil rents in facilitating the developmental needs of the country.

The paper uses a literature review of the main theories regarding national politics and institutional policies in explaining the economic demise of a country due to a natural resource find. It also uses the natural resource find in Norway as a case study, drawing lessons from the effectiveness of Norway’s institutional policies in harnessing maximum benefits from their oil find and how developing nations such as Ghana can do same.

The paper establishes that Ghana’s institutional architecture as regards the production of oil and gas is fraught with inadequacies on all fronts as regards regulations, regulators and the needed logistics. Additionally, the paper also highlights the role of Ghana’s political elite in perpetuating these institutional inadequacies.

The paper highlights the insufficiencies in the institutional readiness for Ghana’s oil find and brings to the fore the influence of Ghana’s politics in contributing to these inadequacies.

With heterogeneous findings dominating the growth and natural resources relations, there is a need to explain the variances in Africa's growth process as induced by robust measures of factor endowments. This study used a comprehensive set of data from the updated database of the World Bank to capture the heterogeneous dimensions of natural resource endowments on growth with a particular focus on establishing complementary evidence on the resource curse hypothesis in energy and environmental economics literature in Africa. These comprehensive data on oil rent, coal rent and forest rent could provide new and insightful evidence on obscure relations on the subject matter.

This paper considers the panel vector error correction model (PVECM) procedure to explain changes in economic growth outcomes as induced by oil rent, coal rent and forest rent. The consideration of the PVECM was premised on the panel unit root process that returns series that were cointegrated at the first-order differentials.

The paper found positive relations between oil rent, coal rent and economic development in Africa. Forest rent, on the other hand, is inversely related to economic growth in Africa. Trade and human capital are positively related to economic growth in Africa, while population growth is negatively associated with economic growth in Africa.

Short-run policies should be tailored towards the stability of fiscal expenditure such that the objective of fiscal policy, which is to maintain the condition of full employment and economic stability and stabilise the rate of growth, can be optimised and sustained. By this, the resource curse will be averted and productive capacity will increase, leading to sustainable growth and development in Africa, where conditions for growth and development remain inadequately met.

The originality of this paper can be viewed from the strength of its arguments and methods adopted to address the questions raised in this paper. This study further illuminated age-long obscure relations in the literature of natural resource endowment and economic growth by taking a disaggregated approach to the component-by-component analysis of natural resources factors (the oil rent, coal rent and forest rent) and their corresponding influence on economic growth in Africa. This pattern remains underexplored mainly in previous literature on the subject. Many African countries are blessed with an abundance of these different natural resources in varying proportions. The misuse and mismanagement of these resources along various dimensions have been the core of the inclination towards the resource curse hypothesis in Africa. Knowing how growth conditions respond to changes in the depth of forest resources, oil resources and coal resources could be useful pointers in Africa's overall energy use and management. This study contributed to the literature on natural resource-induced growth dynamics by offering a generalisable conclusion as to why natural resource-abundance economies are prone to poor economic performance. This study further asks if mineral deposits are a source or reflection of ill growth and underdevelopment in African countries.

A widely held belief before the 1990s – referred to as the oil-blessing hypothesis – was that oil discovery and production should promote economic growth and development and lead to poverty reduction. However, the so-called ‘oil-curse’ hypothesis, postulated by Sachs and Warner in 1995, challenged this belief, thus provoking a heated debate on the theme. The oil-curse hypothesis has been traditionally tested by means of cross-sectional and panel-data models. The author goes beyond these traditional methods to test whether the presence of spatial effects can alter the hypothesis in oil-producing African countries. In particular, this paper aims to investigate the effects on economic growth of oil production, oil resources and oil revenues along with the quality of democratic institutions, investment and openness to trade.

A Durbin spatial model, a cross-sectional model and panel-data model are used.

First, the validity of the spatial Durbin model is vindicated. Second, consistently with the oil-curse hypothesis, oil production, resources, rent and revenues have a negative and generally significant effect on economic growth. This result is robust for across the panel data, spatial Durbin and spatial autoregressive models and for different measures of spatial proximity between countries. Third, the author finds that the extent to which the business environment is perceived as benign for investment has a positive and marginally effect on economic growth. Additionally, economic growth of a country is further stimulated by a spatial proximity of a neighbouring country if the neighbouring country has created strong institutions protecting investments. Fourth, openness to international trade has a positive and marginally significant effect on economic growth.

This paper examines theories and studies that have been done before. However, as the related literature on the growth–resource abundance nexus has rarely examined spatial effects, this study seeks to test jointly the spatial effect and the neighbouring effect on the oil curse hypothesis.

The paper aims to examine the coexistence of formal and informal resource sectors in resource-dependent economies, whose production depends on an exhaustible (e.g. minerals) and a renewable resource stock (e.g. forest), respectively. It then examines the implications of declining mineral stocks on public revenues, labour movements between sectors, and economic growth in an attempt to elucidate the poor economic performance of many mineral-dependent countries.

The paper presents a theoretical model that describes the coexistence of a formal and informal resource-dependent sector, where individuals can direct their work effort. It then assesses how declining mineral stocks influence labour mobility across sectors and environmental degradation.

Decreasing mineral stocks induce a relocation of labour towards informal production and deprive local authorities from public revenues collected within the formal economy. This constrains the ability to improve infrastructure and welfare over time and simultaneously imposes pressure on the local environment.

The paper provides a novel theoretical mechanism that attempts to elucidate the “resource curse”, i.e. the poor economic performance of many mineral-rich economies. It purposely explores the implications of a coexistence of formal and informal resource activities on economic development for resource-dependent economies, in order to obtain new insights into this direction.

This paper explores the role of colonial heritage on long-term economic development from a resource-curse perspective. The authors investigate the impact of colonial exports on long-term economic development through two channels: (1) a direct impact of the economic dependency on natural resources and (2) an indirect impact via its effect on colonial institutions, which persisted over time and influenced current economic development.

To address this issue, the authors use an original data set on French bilateral trade from 1880 to 1912. The authors use partial least square structural equation modeling (PLS-SEM) in the empirical analysis, so that the authors are able to construct latent variables (LVs) for variables that are not directly observable, such as the quality of institutions.

The authors find that exports of primary goods to France had a negative impact on colonial institutions and that for French colonies, this impact was driven by minerals exports. Despite its impact on colonial institutions, exports of French colonies had no significant indirect impact on their current institutions. The authors find no significant direct impact of colonial trade on current development for French colonies. Finally, colonial exports of manufactured products had no significant impact on colonial institutions among French colonies and a positive impact among non-French ones.

Research implications regarding the findings of this paper are, namely, that the relative poor performance within French colonies today cannot be attributed to the extraction of raw materials a century ago. However, human capital and institutional development, instead of exports, are more relatively important for long-term growth. Some limitations in trying to determine the simultaneous relationship among colonial trade, institutions and economic performance are the relation between colonial trade and the extent of extraction from the colonizer, which is hard to quantify, as well as its precise mechanism.

Since the initial institutions set in those former colonies presented a strong persistence in the long run, their governments should focus now on building sound and inclusive political and economic institutions, as well as on investing in human capital in order to foster long-term growth. Once a comprehensive set of institutional and human resources are put in place, the quality and quantity of exports might create a positive spillover on the short-run growth.

One social implication that can be retrieved from this study is the ever-lasting effect of both human capital investment and introduction of inclusive political and economic institutions on the long-run impact of growth.

The paper uses an original primary data set from archival sources to explore the role of colonial heritage on long-term economic development from a resource-curse perspective. It applies a relatively new model partial least squares path modeling (PLS-PM) that allows the construction of LVs for variables that are not directly observable, as well as channeling the impact on growth through both direct and indirect channels. Finally, it allows for the simultaneous multigroup analysis across different colonial groups.