Natural Resources and Economic Outcomes

Why do some countries grow while others do not? This question is one of the most important in economics. Literally thousands of papers have been published on the topic. And it is of enormous policy significance, because the current understanding of the answer to this question affects the behavior of a variety of organizations including the World Bank, the International Monetary Fund, the Inter-American Development Bank and the Gates Foundation. Economists have recently begun to recognize that growth may well be path dependent. If it is, then understanding the current state of economic development is not sufficient to make policy. One needs to understand the historical evolution of the economy or economies in question. Only then can appropriate policies be formulated.