The Research On The "Resources Curse" Phenomenon In Western China

Abundant resources and economic backwardness in western China is impressive. The analysis of that whether there is correlation between the abundant resources and economic backwardness or in other words that whether resources curse is existed in China can help us understand the reasons for regional economic imbalances deeply. Firstly, using panel data, this paper verified the existence of the "resource curse" in provincial level of China and further analyzed several transmission mechanism of the "resource curse". On the basis of the quantitative calculating the relative impact of each mechanism, we focused on the sources of the "resource curse" in china, discussing in externality and property right aspects respectively and put forward policy suggestions.There are three main innovation points in this paper. First, different from the previous literature, we verified that economic convergence hypothesis was not supported in China in the sample period, so we constructed a more realistic model to improve the accuracy of estimates. Then we calculated the ratio of the number of the duty crimes to the number of the employment, representing the level of corruption in the region. The quantitative analysis of China's 31 provinces showed that there is a significant positive correlation between the intensity of the resource exploitation and the level of the corruption, which supporting the typical transmission mechanism that resource abundance induce corruption. Second, there are few researches in the causes of "resource curse" in China, and this is the first time for us to explain the causes of the "resource curse" in western using the theory of externalities. It is because of the intragenerational and intergenerational externalities which existed in the resource extraction process, were not internalized that led to relatively low financial revenue in western. Low financial revenue triggered the insufficient investment in infrastructure education and R&D, and then induced resource curse. This paper further pointed out that the imperfect system of resource taxes and the monopoly of the exploitation of resources between central enterprises are the primary causes of no internalization of the externalities. Third, from the perspective of property rights, this paper comes up with the point of view that the other cause of the "resource curse" in china is unclear property rights of the resource, which lead to corruption. This is a new attempt explaining the "resource curse" phenomenon in western China.