New OxCARRE Review Paper: The Local Economic Impacts of Natural Resource Extraction

OxCARRE affiliates Jim Cust [wordpress.com] (Oxford) and Steven Poelhekke [google.com] (VU Amsterdam) offer a review paper on

The Local Economic Impacts of Natural Resource Extraction

Abstract

Whether it is fair to characterize natural resource wealth as a curse is still debated. Most of the evidence derives from cross-country analyses, providing cases both for and against a potential resource curse. Scholars are increasingly turning to within-country evidence to deepen our understanding of the potential drivers, and outcomes, of resource wealth effects. Moving away from cross-country studies offers new perspectives on the resource curse debate, and can help overcome concerns regarding endogeneity. Therefore, scholars are leveraging datasets which provide greater disaggregation of economic responses and exogenous identification of impacts.

This paper surveys the literature on these studies of local and regional effects of natural resource extraction. We discuss data availability and quality, recent advances in methodological tools, and summarize the main findings of several areas of research. These include the direct impact of natural resource production on local labor markets and welfare, the effects of government spending channels resulting from mining revenue, and regional spillovers. Finally, we take stock of the state of the literature and provide suggestions for future research.

Full paper here [oxcarre.ox.ac.uk], at the OxCARRE Research Paper series [oxcarre.ox.ac.uk].