ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)

The Resource Curse Hypothesis Revisited: Evidence from Asian Economies

Hiroyuki Taguchi and Ni Lar

Correspondence: Hiroyuki Taguchi,

Saitama University, Japan

pdf (787.61 Kb) | doi:


This article examines the applicability of resource curse hypothesis focusing on Asian economies for two different phases for 1980-1995 and for 1995-2014. Its analytical contribution is to trace two kinds of crowding-out logics behind the resource curse: the Dutch Disease logic for resource abundance to crowd out manufacturing activities, and the non-Hartwick-rule logic to crowd out savings and investment, by conducting the statistical tests of Granger causality and impulse responses under vector auto-regression estimation. The empirical outcomes identified the existence of the Dutch Disease in 1980- 1995, but not in 1995-2014, and also represented some approach toward the Hartwickrule in 1995-2014, but not in 1980-1995. Thus, the resource curse hypothesis does not fit with the recent Asian economies. One of the interpretations on the transformation of the resource effects from a curse to a blessing could come from the improvement of institutional quality and the progress in policy efforts in the recent Asian economies.


  Resource curse, Asian economies, crowding-out, Dutch Disease, Hartwick rule and institutional quality.


Alexeev, M. and R. Conrad (2009) “The Elusive Curse of Oil” Review of Economics and Statistics 91, 586-98.

Auty, R. (1993) Sustaining Development in Mineral Economies: The Resource Curse Thesis, Oxford University Press: New York.

Boschini, A.D., J. Pettersson and J. Roine (2007) “Resource Curse or Not: A Question of Appropriability” Scandinavian Journal of Economics 109, 593–617.

Clark, C. (1940) The Conditions of Economic Progress, Macmillan: New York.

Corden, W.M. and J.P. Neary (1982) “Booming sector and de-industrialization in a small open economy” Economic Journal 92, 825–848.

Davis, G. (1995) “Learning to Love the Dutch Disease: Evidence from the Mineral Economies” World Development 23, 1765-79.

Edwards, S. (1986) “A Commoidty Export Boom and the Real Exchange Rate: The Money-Inflation Link” in Natural Resources and the Macroeconomy by J.P. Neary and S. van Wijnbergen, Eds., MIT Press: Cambridge.

Gelb, A.H. (1988) Windfall Gains: Blessing or Curse?, Oxford University Press: New York.

Gylfason, T., T.T. Herbertsson and G. Zoega (1999) “A mixed blessing: Natural resources and economic growth” Macroeconomic Dynamics 3, 204-225.

Harding, T. and A.J. Venables (2010) “Exports, Imports and Foreign Exchange Windfalls” Oxcarre Research Paper, University of Oxford.

Hartwick, J.M. (1977) “Intergenerational Equity and the Investing of Rents from Exhaustible Resources” American Economic Review 66, 972–74.

International Monetary Fund (2014) Macroeconomic Policy Frameworks for Resource-Rich Developing Countries, International Monetary Fund.

Ismail, K. (2010) “The Structural Manifestation of the ‘Dutch Disease’: The Case of Oil Exporting Countries” International Monetary Fund Working Paper 10/103.

Manzano, O. and R. Rigobon (2008) “Resource Curse or Debt Overhang” National Bureau of Economic Research Working paper No. 8390, Cambridge, MA.

Mehlum, H., K. Moene and R. Torvik (2006) “Institutions and the Resource Curse” Economic Journal 116, 1–20.

Papadamou, S., M. Sidiropoulos and E. Spyromitros, (2015) "Central bank transparency and the interest rate channel: Evidence from emerging economies," Economic Modelling, 48, 167-174.

Sachs, J.D., A.M. Warner (1995) “Natural resource abundance and economic growth” National Bureau of Economic Research Working paper No. 5398, Cambridge, MA.

Sachs, J.D., A.M. Warner (2001) “Natural Resources and Economic Development: The Curse of Natural Resources” European Economic Review 45, 827-838.

Sala-I-Martin, X. and A.A. Subramanian (2003) “Addressing the Natural Resource Curse: An Illustration from Nigeria” IMF Working Paper WP/03/139.

van der Ploeg, F. (2011) “Natural Resources: Curse or Blessing?” Journal of Economic Literature 49, 366-420.

World Bank (2011) The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium, the World Bank.