A couple of weeks ago I linked to a post from Ed Glaeser on his research on urban dynamism. Glaeser has posted a follow-up to his initial comments. He asks:
For decades, economists have debated the “ Dutch Disease” and other ailments associated with too much success. The discovery of natural gas in the North Sea supposedly helped to de-industrialize the Netherlands by raising exchange rates and making Dutch manufacturing less competitive internationally. Almost 15 years ago, Jeffrey Sachs found a negative correlation between resource abundance and economic growth in the developing world, perhaps because those resources fueled conflict and enabled dictators.
Can some types of prosperity imperil cities as well as countries?
His answer: maybe. I recommend his entire post, but in brief he’s applying much of the research on the role of natural resources in economic growth, and there is substantial evidence on a broad continuum between “no impact” and “totally deterministic” (not much evidence at the endpoints, of course). If you are interested in economic growth, urban dynamism, or regional development, Glaeser’s analysis will be of interest to you.
Interestingly, in locating the KP link above I did a site search, which showed that I have talked about Glaeser’s research here more than I realized.
UPDATE: in many ways, Glaeser’s argument rests on a lot of the same ideas as in the “resource curse” literature that Mike delves into in his post this morning.