Natural Resources Curse in the long run? Bolivia, Chile and Peru in the Nordic countries’ mirror

Abstract

Were there extreme differences between Latin American and Nordic countries in the 19th century? Several economic indicators suggest the right answer is no. In the year 1850, the GDP per capita ratio between, for example, Bolivia and Sweden was 0.7; in 2010 this ratio had widened to 0.12. How these extremely high differences are possible between countries with similarly enormous natural resources endowments? The aim of this article is to compare public policies and economic indicators related with Natural Resources (NNRR) management in three Latin American countries (Bolivia, Chile and Peru) and two Nordic countries (Norway and Sweden) in a long-term perspective. The article analyses the following components of economic development: i) the composition of exports throughout time; ii) economic linkages between the export sector and the rest of the economy; iii) the composition of taxes; iv) human capital formation and the accumulation of knowledge. The comparison suggests new areas on the determinants of successful management of natural resources and the countries' ability to escape from the so-called resource curse.