Natural resource funds, institutional qualityand governance: A systematic literature review

Authors

DOI:

https://doi.org/10.18559/ref.2024.2.949

Keywords:

natural resource funds, governance, institutional quality, resource curse, systematic literature review

Abstract

In recent years, there has been an international debate on the effectiveness of resource funds in the context of the “resource curse”. One aspect of assessing the effectiveness of these funds, which is receiving increasing attention, is determining the relationship between the funds and institutional quality and governance. The objective of this study is to systematically evaluate all available evidence regarding the relationship between the ef- fectiveness of natural resource funds, institutional quality and governance in the context of countering the “resource curse”. The study employed the SLR technique to examine 40 carefully selected articles for the period 1990–2023. In order to enhance the credibility of the analysis, an up-to-date information map derived from the literature was generated using the VOSviewer software. The study found that the analysed issue is both new and relevant, with many aspects lacking unanimous solutions. It was observed that the relationship between funds and institutional quality and governance exists, as indicated by both qualitative and quantitative research. The most significant studies on this topic emerged after 2005. The literature is largely concentrated on the significance of institutional quality and governance for fund effectiveness. 

JEL Classification

Government Policy and Regulation (G18)

Downloads

Download data is not yet available.

References

Allegret, J. P., Benkhodja, M. T., & Razafindrabe, T. (2018) Monetary policy, oil stabilization fund and the Dutch disease. GREDEG Working Papers, 06. https://hal.science/hal-01796312/document
View in Google Scholar

Arezki, R., & van der Ploeg, F. (2007). Can the natural resource curse be turned into a blessing: The role of trade policies and institutions. International Monetary Fund Working Papers, 055. https://doi.org/10.5089/9781451866193.001 DOI: https://doi.org/10.2139/ssrn.969869
View in Google Scholar

Asik, G. A. (2017). Effectiveness of stabilization funds in managing volatility in oil-rich countries [unpublished manuscript]. TOBB Economics and Technology University, Ankara, Türkiye.
View in Google Scholar

Auty, R. M. (1993). Sustaining development in mineral economies: The resource curse the- sis. Routledge. https://doi.org/10.4324/9780203422595 DOI: https://doi.org/10.4324/9780203422595
View in Google Scholar

Auty, R. M. (2001). Resource abundance and economic development. Oxford University Press. https://doi.org/10.1093/0199275785.001.0001 DOI: https://doi.org/10.1093/0199275785.001.0001
View in Google Scholar

Bacon, R., & Tordo, S. (2006). Experience with oil funds: Institutional and financial aspects. ESMAP Report, 321. https://www.esmap.org/sites/default/files/esmap-files/FR321-06_GBL_Experiences_with_Oil_Funds.pdf
View in Google Scholar

Baena, C., Sévi, B., & Warrack, A. (2012). Funds from non-renewable energy resources: Policy lessons from Alaska and Alberta. Energy Policy, 51, 569–577. https://doi.org/10.1016/j.enpol.2012.08.076 DOI: https://doi.org/10.1016/j.enpol.2012.08.076
View in Google Scholar

Bagattini, G. Y. (2011). The political economy of stabilization funds: Measuring their success in resource-dependent countries. IDS Working Paper, 356. https://www.ids.ac.uk/download.php?file=files/dmfile/Wp356.pdf DOI: https://doi.org/10.1111/j.2040-0209.2011.00356_1.x
View in Google Scholar

Baland, J. M., & Francois P. (2000). Rent-seeking and resource booms. Journal of Development Economics, 61(2), 527–542. https://doi.org/10.1016/S0304-3878(00)00067-5 DOI: https://doi.org/10.1016/S0304-3878(00)00067-5
View in Google Scholar

Barma, N. H., Kaiser, K., Le, T. M., & Viñuela, L. (2012). Rents to riches? The political economy of natural resource-led development. World Bank. DOI: https://doi.org/10.1596/978-0-8213-8480-0
View in Google Scholar

Barnett, S., & Ossowski, R. (2002). Operational aspects of fiscal policy in oil-producing countries. International Monetary Fund Working Papers, 177. https://doi.org/10.5089/9781451858884.001 DOI: https://doi.org/10.2139/ssrn.880239
View in Google Scholar

Bhattacharyya, S., & Hodler, R. (2010). Natural resources, democracy and corruption. European Economic Review, 54(4). 608–621. https://doi.org/10.1016/j.euroecorev.2009.10.004 DOI: https://doi.org/10.1016/j.euroecorev.2009.10.004
View in Google Scholar

Bortolotti, B., Fotak, V., & Hogg, C. (2020). Sovereign wealth funds and the COVID-19 shock: Economic and financial resilience in resource-rich countries. Centre for Applied Research on International Markets, Banking, Finance and Regulation, University of Bocconi, Working Paper Series, 147. https://doi.org/10.2139/ssrn.3665993 DOI: https://doi.org/10.2139/ssrn.3665993
View in Google Scholar

Brunnschweiler, C. N. (2008). Cursing the blessings? Natural resource abundance, instimic growth. World Development, 36(3), 399–419. https://doi.org/10.1016/j.worlddev.2007.03.004 DOI: https://doi.org/10.1016/j.worlddev.2007.03.004
View in Google Scholar

Chalk, N. A., El-Arian, M. A., Fennell, S. J., Kireyev, A. P., & Wilson, J. F. (1997). From reconstruction to accumulation for future generations: Kuwait. Occasional Paper, International Monetary Fund, 150. https://doi.org/10.5089/9781557756237.084 DOI: https://doi.org/10.5089/9781557756237.084
View in Google Scholar

Çiçekçi, C., & Gaygisiz, E. (2023). Procyclicality of fiscal policy in oil-rich countries: Roles of resource funds and institutional quality. Resource Policy, 85, 103675. https://doi.org/10.1016/j.resourpol.2023.103675 DOI: https://doi.org/10.1016/j.resourpol.2023.103675
View in Google Scholar

Clemente, L., Faris, R., & Puente, A. (2002). Natural resource dependence, volatility and economic performance in Venezuela: The role of a stabilization fund. Andean Competitiveness Project Working Paper, Center for International Development, Harvard University. http://www.redeconomia.org.ve/redeconomia/admin_redeconomia/uploads/temas%20de%20investigacion/2003441537570a1690485.pdf
View in Google Scholar

Cooper, H., Hedges, L., & Valentine, J. (2019). The handbook of research synthesis and meta-analysis. Russell Sage Foundation. DOI: https://doi.org/10.7758/9781610448864
View in Google Scholar

Crain, W. M., & Devlin, J. (2003). Nonrenewable resource funds: A red herring for fiscal stability? Paper presented at the annual meeting of the American Political Science Association, August 27, Philadelphia, PA.
View in Google Scholar

Davis, J., Ossowski, R., Daniel, J., & Barnett, S. (2001). Stabilization and savings funds for non-renewable resources. International Monetary Fund, Occasional Paper, 205, 273–315. https://www.imf.org/external/pubs/nft/op/205/ DOI: https://doi.org/10.5089/9781589060197.084
View in Google Scholar

Deku, S. Y., Kara, A., & Zhou, Y. (2019). Securitization, bank behaviour and financial stability: A systematic review of the recent empirical literature. International Review of Financial Analysis, 61, 245–254. https://doi.org/10.1016/j.irfa.2018.11.013 DOI: https://doi.org/10.1016/j.irfa.2018.11.013
View in Google Scholar

Devlin, J., & Titman, S. (2004). Managing oil price risk in developing countries. The World Bank Research Observer, World Bank Group, 19(1), 119–139. https://doi.org/10.1093/wbro/lkh015 DOI: https://doi.org/10.1093/wbro/lkh015
View in Google Scholar

Dymitrowska, Y. (2015). „Klątwa bogactwa” a polityka gospodarcza państwa. Simple Publishing.
View in Google Scholar

Dymitrowska, Y. (2020). Effectiveness of a national resource fund in counteracting the resource curse. Organization and Management, 1(49), 23–40. https://doi.org/10.29119/1899-6116.2020.49.2 DOI: https://doi.org/10.29119/1899-6116.2020.49.2
View in Google Scholar

Dymitrowska, Y. (2023a). Natural resource funds: Essence and classification. In A. P. Balcerzak & I. Pietryka (Eds.), Proceedings of the 12th International Conference on Applied Economics Contemporary Issues in Economy: Finance (pp. 39–49). Instytut Badań Gospodarczych.
View in Google Scholar

Dymitrowska, Y. (2023b). Savings natural resource funds: Effectiveness of the Norwegian Government Pension Fund Global. Ekonomia i Prawo. Economics and Law, 22(3), 471– 495. https://doi.org/10.12775/EiP.2023.026 DOI: https://doi.org/10.12775/EiP.2023.026
View in Google Scholar

Eifert, B., Gelb, A., & Tallroth, N. B. (2002). The political economy of fiscal policy and economic management in oil exporting countries. The World Bank Policy Research Working Paper, 2899. https://tiny.pl/5bgybc58
View in Google Scholar

Engel, E., & Valdés, R. (2000). Optimal fiscal strategy for oil exporting countries. International Monetary Fund Working Paper, 118. https://www.imf.org/external/pubs/ft/wp/2000/wp00118.pdf DOI: https://doi.org/10.5089/9781451854077.001
View in Google Scholar

Fasano-Filho, U. (2000). Review of the experience with oil stabilization and savings funds in selected countries. International Monetary Fund Working Papers, 112. https://doi.org/10.5089/9781451853599.001 DOI: https://doi.org/10.5089/9781451853599.001
View in Google Scholar

Garg, R., & Shukla, A. (2021). The impact and implications of SWFs: A systematic review of literature. Qualitative Research in Financial Markets, 13(5). 580–607. https://doi.org/10.1108/QRFM-08-2020-0171 DOI: https://doi.org/10.1108/QRFM-08-2020-0171
View in Google Scholar

Gould, M. (2010). Managing manna from below: Sovereign wealth funds and extractive industries in the Pacific. Economic Roundup, 1, 63–86.
View in Google Scholar

Hjort, J. (2006). Citizen funds and Dutch disease in developing countries. Resource Policy, 31(3), 183–191. https://doi.org/10.1016/j.resourpol.2007.01.001 DOI: https://doi.org/10.1016/j.resourpol.2007.01.001
View in Google Scholar

James, A., Retting, T., Shogren, J. F., Watson, B., & Wills, S. (2022). Sovereign wealth funds in theory and practice. Annual Review of Resource Economics, 14(1), 621–646. https://doi.org/10.1146/annurev-resource-111920-015758 DOI: https://doi.org/10.1146/annurev-resource-111920-015758
View in Google Scholar

Kalyuzhnova, Y. (2006). Overcoming the curse of hydrocarbon: Goals and governance in the oil funds of Kazakhstan and Azerbaijan. Comparative Economic Studies, 48, 583– 613. https://doi.org/10.1057/palgrave.ces.8100160 DOI: https://doi.org/10.1057/palgrave.ces.8100160
View in Google Scholar

Karl, T. L. (1997). Paradox of plenty: Oil booms and petro-states. University of California Press. https://doi.org/10.1525/9780520918696 DOI: https://doi.org/10.1525/9780520918696
View in Google Scholar

Koh, W. C. (2016). Fiscal policy in oil-exporting countries: The roles of oil funds and insti- tutional quality. Review of Development Economics, 21(3), 567–590. https://doi.org/10.1111/rode.12293 DOI: https://doi.org/10.1111/rode.12293
View in Google Scholar

Le Borgne, E., & Medas, P. (2007). Sovereign wealth funds in the pacific island countries: Macro-fiscal linkages. International Monetary Fund Working Papers, 297. https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Sovereign-Wealth-Funds-in-the- Pacific-Island-Countries-Macro-Fiscal-Linkages-21519 DOI: https://doi.org/10.2139/ssrn.1087176
View in Google Scholar

Leite, C., & Weidmann, J. (1999). Does mother nature corrupt? Natural resources, corruption and economic growth. International Monetary Fund Working Papers, 085. https://doi.org/10.5089/9781451850734.001 DOI: https://doi.org/10.2139/ssrn.3923370
View in Google Scholar

Lücke, M. (2011). Stabilization and savings funds to manage natural resource revenues: Kazakhstan and Azerbaijan versus Norway. Comparative Economic Studies, 53, 35–56. https://doi.org/10.1057/ces.2010.28 DOI: https://doi.org/10.1057/ces.2010.28
View in Google Scholar

Medina-Bueno, J. L., Guimón, J., & Cancino, Ch. A. (2021). Natural resource funds for innovation in emerging countries: An assessment of the Chilean experience. Competitiveness Review: An International Business Journal, 31(5), 901–919. https://doi.org/10.1108/CR-01-2021-0018 DOI: https://doi.org/10.1108/CR-01-2021-0018
View in Google Scholar

Merlevede, B., Schoors, K., & van Aarle, B. V. (2009). Russia from bust to boom and back: Oil price, Dutch disease and stabilisation fund. Comparative Economic Studies, 51, 213– 241. https://doi.org/10.1057/ces.2009.2 DOI: https://doi.org/10.1057/ces.2009.2
View in Google Scholar

Neumayer, E. (2004). Does the “resource curse” hold for growth in genuine income as well? World Development, 32(10), 1627–1640. https://doi.org/10.1016/j.world-dev.2004.05.005 DOI: https://doi.org/10.1016/j.worlddev.2004.05.005
View in Google Scholar

North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press. https://doi.org/10.1017/cbo9780511808678 DOI: https://doi.org/10.1017/CBO9780511808678
View in Google Scholar

Ossowski, R., Villafuerte, M., Medas, P., & Thomas, T. (2008). Managing the oil revenue boom: The role of fiscal institutions. International Monetary Fund Occasional Paper, 260. https://doi.org/10.5089/9781589067189.084 DOI: https://doi.org/10.5089/9781589067189.084
View in Google Scholar

Ouoba, Y. (2016). Natural resources: Funds and economic performance of resource-rich countries. Resource Policy, 50, 108–116. https://doi.org/10.1016/j.resourpol.2016.09.003 DOI: https://doi.org/10.1016/j.resourpol.2016.09.003
View in Google Scholar

Ouoba, Y. (2020). Natural resources fund types and capital accumulation: A comparative analysis. Resource Policy, 66, 101635. https://doi.org/10.1016/j.resourpol.2020.101635 DOI: https://doi.org/10.1016/j.resourpol.2020.101635
View in Google Scholar

Ross, M. (2001). Does oil hinder democracy? World Politics, 53, 325–361. https://doi.org/10.1353/wp.2001.0011 DOI: https://doi.org/10.1353/wp.2001.0011
View in Google Scholar

Sachs, J. D., & Warner, A. M. (2001). Natural resources and economic development. The curse of natural resources. European Economic Review, 45(4–6). 827–838. https://doi. org/10.1016/S0014-2921(01)00125-8 DOI: https://doi.org/10.1016/S0014-2921(01)00125-8
View in Google Scholar

Sala-i-Martin, X., & Subramanian, A. A. (2013). Addressing the natural resource curse: An illustration from Nigeria. Journal of African Economies, 22(4), 570–615. https://doi.org/10.1093/jae/ejs033 DOI: https://doi.org/10.1093/jae/ejs033
View in Google Scholar

Shabsigh, G., & Ilahi, N. (2007). Looking beyond the fiscal: Do oil funds bring macro- economic stability? International Monetary Fund Working Papers, 096. https://doi.org/10.5089/9781451866605.001 DOI: https://doi.org/10.2139/ssrn.983282
View in Google Scholar

Sugawara, N. (2014). From volatility to stability in expenditure: Stabilization funds in re- source-rich countries. International Monetary Fund Working Papers, 043. https://doi.org/10.5089/9781475515275.001 DOI: https://doi.org/10.5089/9781475515275.001
View in Google Scholar

SWFI (Sovereign Wealth Fund Institute). (n.d.). Top 100 Largest sovereign wealth fund rankings by total assets. Retrieved September 26, 2023 from https://www.swfinstitute.org/fund-rankings/sovereign-wealth-fund
View in Google Scholar

Taguchi, H., & Ganbayar, J. (2022). Natural resource funds: Their objectives and effectiveness. Sustainability, 14(17), 10986. https://doi.org/10.3390/su141710986 DOI: https://doi.org/10.3390/su141710986
View in Google Scholar

Torvik, R. (2018). Should developing countries establish petroleum funds? Energy Journal, 39(4), 85–102. https://doi.org/10.5547/01956574.39.4.rtor DOI: https://doi.org/10.5547/01956574.39.4.rtor
View in Google Scholar

Tsalik, S. (2003). Caspian oil windfalls: Who will benefit? Open Society Institute.
View in Google Scholar

Tsani, S. (2013). Natural resources, governance and institutional quality: The role of re- source funds. Resource Policy, 38(2), 181–195. https://doi.org/10.1016/j.resour-pol.2012.11.001 DOI: https://doi.org/10.1016/j.resourpol.2012.11.001
View in Google Scholar

Tsani, S. (2015). On the relationship between resource funds, governance and institutions: Evidence from quantile regression analysis. Resource Policy, 44, 94–111. https://doi.org/10.1016/j.resourpol.2015.01.003 DOI: https://doi.org/10.1016/j.resourpol.2015.01.003
View in Google Scholar

Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14(3), 207–222. https://doi.org/10.1111/1467-8551.00375 DOI: https://doi.org/10.1111/1467-8551.00375
View in Google Scholar

Usui, N. (2007). How Effective Are oil funds? Managing resource windfalls in Azerbaijan and Kazakhstan. Asian Development Bank Policy. https://www.adb.org/sites/default/files/publication/28117/pb050.pdf
View in Google Scholar

van der Ploeg, F. (2011). Natural resources: Curse or blessing? Journal of Economic Literature, 49(2), 366–420. https://doi.org/10.1257/jel.49.2.366 DOI: https://doi.org/10.1257/jel.49.2.366
View in Google Scholar

Villafuerte, M., Lopez-Murphy, P., & Ossowski, R. (2010). Riding the roller coaster: Fiscal policies of nonrenewable resource exporters in Latin America and the Caribbean. International Monetary Fund Working Paper, 251. https://www.imf.org/en/Publications/2/31/Riding-the-Roller-Coaster-Fiscal-Policies-of-Nonrenewable-Resource-Exporters-in-Latin-24342 DOI: https://doi.org/10.2139/ssrn.1750740
View in Google Scholar

Downloads

Published

2024-10-09

Issue

Section

Articles

How to Cite

Dymitrowska, Y. (2024). Natural resource funds, institutional qualityand governance: A systematic literature review. Research Papers in Economics and Finance, 8(2). https://doi.org/10.18559/ref.2024.2.949

Similar Articles

1-10 of 38

You may also start an advanced similarity search for this article.