Abstract
It does appear to be a straightforward thinking that economies with abundant natural resources stand a better chance of growing faster than those with relatively little or no natural resources. In fact, this perception is strongly upheld by theories such as the factor proportions theory which tend to stress that if an economy has abundant resources; then it is better positioned to produce and export in large quantities those produces that use the available relatively abundant resources. However, over the years, researchers and scholars have revealed through their research and scholarly works that it is possible for an economy to have abundant resources and yet grow very slowly. On account of such preposition, a number of perspectives have been put forward attempting to explain why natural resource abundant economies tend to grow slowly. Considering that there are a number of several competing perspectives to explain the existence of this phenomenon, it is very difficult to put a finger on a single perspective as the perfect explanation for the existence of the phenomenon. In light of this situation, this paper attempts to cross-examine the various prevailing perspectives and draw conclusions on what possibly could stand out from each perspective as credible explanation for the slow growth of natural resource abundant economies. Keywords: Economies, Natural Resources, Abundant Resources, Growth, Development DOI: 10.7176/JESD/10-14-13 Publication date: July 31 st 2020
Highlights
This paper attempts to cross – examine the various competing perspectives seeking to explain why natural resource abundant economies tend to grow slowly
Perspectives on Why Resource Abundant Economies tend to Grow Slowly It is un-doubtable that there are a number of perspectives that have been put forward to explain the phenomenon concerning the slow growth of economies with abundant resources
This paper finds that from the perspective on living beyond their means, if the abundant resources in a particular country only enable such a country to enjoy temporary high income levels, such a country may experience slow growth when the so called abundant resource can no longer enable the country to enjoy benefits of high income levels
Summary
This paper attempts to cross – examine the various competing perspectives seeking to explain why natural resource abundant economies tend to grow slowly. Murshed (2004) in his contention points out that a country with a greater endowment of natural resources relative to the rest of the World will be subject to a ‘‘winner’s curse’’ because in the long will be worse than that of countries that have relatively lower resource endowment. As revealed through perspectives put forward by researchers and scholars, the growth trend in the so considered well endowed natural resource countries befits the explanation and the logic behind the view that having abundant resources could be a gate pass to economic growth and prosperity
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