The Impact Of Natural Resources On Economic Institutions:Cursing Or Blessing?

Existing studies usually take marketization as an exogenous institutional variable into the common theoretical framework for studying economic growth.The proposition of "Resource Curse" usually regards the institution as the transmission mechanism.In this paper,the marketization is endogenized,and "stripped" from the transmission mechanism.Meanwhile we select both the abundance and the dependence to measure natural resources.Finally,we try to analyze the influence mechanism of "Institution Curse" from the perspective of political centralization and fiscal decentralization.This paper uses Chinese inter-provincial panel data from 1997 to 2014.The conclusions show:Firstly,in China,there is a significantly positive relationship between marketization and natural resource abundance,but a negative relationship between marketization and natural resource dependence,meaning that the abundance "blesses"the marketization,while the dependence "curses" the marketization.Marketization consists of five main aspects,i.e."Relationship between government and the market","Development of non-state-owned economy","Development of product market","Development of factor market" and "Development of market intermediaries and environment of legal system".Empirical results suggest that the abundance takes promoting effects on these five aspects,while the dependence exhibits inhibition effects on these five aspects.Besides,There may exist some quadratic curve relationship between marketization and natural resources,while,both the fitting diagram and the empirical results imply that the linear relationship between marketization and nature resources is more meaningful.Secondly,under the Chinese vertical political centralization and fiscal decentralization,behaviors of local governments show complex effects on the relationships between marketization and natural resources.On the one hand,due to the excessive intervention of the government,the fiscal decentralization will weaken the "blessing" effect of natural resource abundance on marketization.On the other hand,the effects on the relationship between marketization and the dependence present period differences and regional differences.During the period of 1997 and 2009,due to serious corruption causing serious "grab effects",the fiscal decentralization strengthens the "cursing" effect.As of 2014,on the one hand,with the effective fight against corruption and the continuous improvement of the marketization,the "grab behaviors" will be curbed;on the other hand,the behaviors to promote the circulation of dependent natural resources and related products play an important role,thus weakening the "cursing" effect.In addition,compared to the eastern region,effects of the fiscal decentralization on the relationship between marketization and natural resources in the central and western regions,are more significant.Finally,areas with abundant natural resources tend to give priority to the development of resource-based industries,and have higher degree of dependence on natural resources.Considering both "blessing" effects and "cursing"effects of natural resources,as well as the complexity of local government behaviors,the central government should improve the top-level system design,and take appropriate incentives to guide the behaviors of local governments effectively.