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Mineral Resources: Market Blessing, Government Curse (Institutions matter, per Peter Kaznacheev)

By Robert Bradley Jr. -- March 22, 2017

“It is no coincidence that a breakthrough in unconventional hydrocarbons (i.e., shale oil, shale gas, oil sands, and coalbed methane) should have taken place in some of the most economically free countries of the world, such as the United States, Canada, and Australia. The combination of secure property rights, transparent and efficient regulation, a favorable tax regime, and minimal red tape made it possible.”

“One of the main obstacles to economic growth and social development in many resource economies is rent-seeking. It is not a unique feature of resource economies, but it does appear to have a particularly strong effect on them and to produce institutional weaknesses.”

– Peter Kaznacheev, Curse or Blessing? How Institutions Determine Success in Resource-Rich Economies, Cato Policy Analysis No. 808 (January 11, 2017)

This new study by Peter Kaznacheev, who is Senior Research Fellow at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) in Moscow, valuably interprets mineral resource theory in light of institutions (read: market versus government control).…