Natural resources: Funds and economic performance of resource-rich countries

Resource funds have been widely defended in the theoretical literature as a solution to the resource curse. In this work, empirical analyses of a sample of 28 resource-rich countries over the period 1985-2010 do not support this argument. Rather, the results indicate that resource funds have a negative and significant effect on growth and that this finding is robust under alternative estimation techniques. Moreover, the results do not validate the hypothesis of the resource curse due to the positive effect of resource dependence on growth. Finally, the study provides evidence that the negative component of the curse is captured by the resource funds. The implications in terms of natural resources funds management are discussed.