Browsing by Author "Zagozina, Maria"

The curse of natural resources is broadly addressed in the literature on economic development and growth. It is generally believed that resource abundant economies tend to grow more slowly than economies of low resource endowment. In the former Soviet countries, resource dependence determines country economic strategy in many aspects. Due to old Soviet legacies, the countries struggle to build a truly civil society, with a developed industrial production sector. This paper investigates the existence of the resource curse in the post-Soviet states, analyzing the main economic, social, and political issues and problems emerging from high resource endowment. The research objective of the current study is to examine the economic dependence of natural resource exports in the post-Soviet states, as well as to test the effect of high resource endowment on economic growth. In this paper, a review of resource curse literature and further empirical panel analysis based on chosen econometric model and methods (OLS, TSLS) are carried out. Natural resources in the model were divided into two main categories, i.e. point-source (oil, gas, minerals, metals) and diffuse (agriculture, forest) resources. The former Soviet economies that are highly dependent on natural resources tend to develop rather slowly due to inefficient resource management, rent-seeking behavior, high level of corruption, lack of political freedom, and poor performance in non-resource sector. However, the main finding from the empirical testing indicates a highly significant positive effect of resource exports on economic growth, for both point-source and diffuse resources. Upon further analysis, it is concluded that agriculture exports in GDP provide the highest positive effect on economic growth. Institutional quality provides little impact on economic growth, although theoretically its importance is detected. Thus, in the post-Soviet countries high resource abundance tend to have a positive direct association with economic growth; nevertheless, economic growth in this case does not lead to country development.