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Non-resource revenues and the resource curse in different institutional structures: The DIGNAR-MTFF model
Department of Business and Management, School of Management and Economics, University of Kurdistan Hewlêr (UKH), Erbil, Iraq.
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Centre for Entrepreneurship and Spatial Economics (CEnSE).ORCID iD: 0000-0002-7902-4683
Department of Economics, University of Kurdistan, Sanandaj, Iran.
Tarbiat Modares University, Tehran, Iran.
2022 (English)In: Resources policy, ISSN 0301-4207, E-ISSN 1873-7641, Vol. 79, article id 103120Article in journal (Refereed) Published
Abstract [en]

Numerous studies have examined the resource curse using different perspectives. This study investigates how the resource curse occurs in three countries with different institutional structures using a new model. The DIGNAR-MTFF model introduced and presented in this article is a combination of the DIGNAR model and the FMM-MTFF model. This model includes a consistent framework for industrial production, the inflow of intermediate goods, public investment inefficiencies, learning-by-doing externalities in foreign and intermediate goods sectors, and absorptive capacity constraints. In this research, the Input-Output Table data for Saudi Arabia, Mexico, and Norway in 2015 have been used. A simplified three-sector version of the Input-Output table compares the model's output for countries. The model is used under a specific scenario with different oil revenue cycles. The results for Saudi Arabia, a country with a specific institutional structure characterized by high dependence on oil revenues, show that the effects of abundant resources on non-resource incomes are severely negative indicating that Saudi Arabia experienced the Dutch disease with more intensity. The Dutch disease was less severe in Norway and Mexico, which have broader tax systems based on different institutional structures. The model's results show the role of an efficient tax system in overcoming natural resources' revenue cycles and the independence of the economies from these revenue cycles thus avoiding the resource curse.

Place, publisher, year, edition, pages
Elsevier, 2022. Vol. 79, article id 103120
Keywords [en]
Non-resource revenues, Resource curse, DSGE Models, DIGNAR-MTFF, Oil-rich countries
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-59075DOI: 10.1016/j.resourpol.2022.103120ISI: 000918838800002Scopus ID: 2-s2.0-85143121582Local ID: ;intsam;59075OAI: oai:DiVA.org:hj-59075DiVA, id: diva2:1716000
Available from: 2022-12-05 Created: 2022-12-05 Last updated: 2023-02-23Bibliographically approved

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