The document seeks to measure the impact of political governance on economic growth. This being said, the authors explore the role of institutions in economic growth, for which they use a recently developed index by Henisz and Zelner (2010). Furthermore, the paper estimates a flexible econometric growth model in order to analyze the natural resource curse, this being that under certain conditions natural resources can be harmful to a country’s economic development.
The document is organized as follows. After a brief introduction, section two contains a literature review on the subject under analysis, whilst section three presents the standard growth model and replicates the main findings of recent literature on the growth impact of political institutions. For its part, chapter four undertakes a critical econometric assessment of the empirical literature and estimates the flexible econometric model. Finally, section five provides some concluding arguments.
To conclude, the authors claim that under certain conditions, natural resources can be harmful to development, hence generating the so called natural resource curse. Moreover, the document suggests that the curse is a long-term phenomenon, which can be exacerbated by bad political governance, thereby becoming harmful to economic development.