Institutions, commodity dependence and economic growth: Evidence from Latin America

• Autor(a) principal: Vaz, Pedro Miguel da Costa
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/31117
• topic: Latin America; Crescimento económico -- Economic growth; Institutional quality; Commodity dependence; Resource curse; América Latina; Qualidade institucional; Dependência de recursos naturais; Maldição dos recursos naturais

This study examines 14 Latin American countries over a period of 51 years (1971-2021) and aims to evaluate the hypothesis of the existence of a "resource curse". As well, the role that institutions play in it. The countries were divided into two groups according to their institutional quality, poor and medium/good, and the natural resources were divided into energy and agricultural. The results emphasise the role of institutions as a buffer against the negative effects of a high-income dependence from natural resources. The study overviews the history of the region and analyses the relationship between natural resources, institutions and economic performance over time. The evidence strongly points to the existence of a "resource curse" when countries have bad institutions. This means that countries with bad institutions cannot dodge the detrimental effects of a high dependence on natural resources on economic growth. This is the case with the income from energy commodities, in the case of agricultural ones, they were found to have a positive impact on economic growth for both groups of countries. These conclusions could have practical implications for public policy. Not just for Latin America, but for developing countries. We support the idea that countries should pursue to improve their institutional quality in order to achieve sustainable economic growth.