Beating up a Dead Horse – Natural Resource Curse Revisited Cross Country Study of Natural Resource Booms and Welfare in Africa

This paper set out to ask a question whether natural resource booms are likely to increase the welfare of countries experiencing them. Literature review and empirical study showed that there is ample evidence and arguments for both sides, depending on how the study is conducted. The empirical findings in this study provided mixed results, which indicate that those countries in Africa that experienced a natural resource boom between 2000 and 2009 increased their gross national income more than countries that did not experience a boom. At the same time, the booming countries failed to improve their performance in terms of social welfare indicators to the same extent as the non-booming countries. This could be explained by a time lag in translating the growth to welfare, or there might be other unobserved variables explaining the result. The conclusion is that it is difficult to determine whether natural resources are a curse or a blessing for their respective countries.