Three essays on economic development

This dissertation consists of three essays on economic development in natural resource abundant economies. An abstract for each of the three essays follows.;Essay 1. The importance of natural resources in economic development has long been recognized in economic research. In this regard, the general belief was that natural resources are a blessing for economic development if not a necessary condition for sustainable economic growth. However, recent empirical research on economic growth has documented a puzzling fact that on average resource rich countries do not grow as fast as their resource poor counterparts. This paper proposes a link between disappointing economic development and resource abundance. A simple political economy model of resource abundance is described. It is demonstrated that in countries well endowed with natural resources, governments are more concerned with increasing net revenues of interest groups than implementing development friendly reforms.;Essay 2. Learning by doing is one of the most popular structures for studying economic growth. Learning by doing characterizes the phenomenon of improving productivity or reducing cost by repetition of the production process. In this paper we study the relationship between resource abundance and economic growth within an endogenous growth model. A simple theoretical model of endogenous growth is built which shows an inverse relationship between resource abundance and economic growth. It is shown that the steady state growth rate of the economy will be determined by the relative contribution to growth of the two sectors.;Essay 3. This paper adds to the empirical literature relating growth and natural resource abundance using a data set consisting of 92 countries over the period of 1960--1999. The main finding of this study is that natural resource abundance is an important determinant of the long run growth rate. As regression results indicate, resource rich countries experience on average a lower rate of economic growth compared to resource poor countries. This negative association between resource intensity and economic growth is stable and robust in the sense that it remains unchanged and significant across different regression specifications and independent of the estimation method.