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Currently, evidence on the ‘resource curse’ yields a conundrum. While there is much crosssection evidence to support the curse hypothesis, time series analyses using vector autoregressive (VAR) models have found that commodity booms raise the growth of commodity exporters. This paper adopts panel cointegration methodology to explore longer term effects than permitted using VARs. We find strong evidence of a resource curse. Commodity booms have positive short-term effects on output, but adverse long-term effects. The long-term effects are confined to “high-rent”, non-agricultural commodities. We also find that the resource curse is avoided by countries with sufficiently good institutions. We test the channels of the resource curse proposed in the literature and find that a substantial part of it is explained by high public and private consumption, low or inefficient total investment, and an overvalued exchange rate. Our results fully account for the cross-section results in the seminal

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Natural resource abundant countries constitute both growth losers and growth winners, and the main difference between the success cases and the cases of failure lays in the quality of institutions. With grabber friendly institutions more natural resources push aggregate income down, while with producer friendly institutions more natural resources increase income. Such a theory finds strong support in data. A key question we also discuss is if resources in addition alter the quality of institutions. When that is the case, countries with bad institutions suffer a double resource curse- as the deterioration of institutions strenghtens the negative effect of more natural resources.

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The paper explores the relationship between development, democracy and civil war. I review some contributions to the literature on the bilateral relationships between the three variables, and argue that we should expect the relationship between democracy and civil war to be contingent on the levels of income, literacy/education, and primary commodity dependence. I estimate a set of different models to investigate whether the relationship between democracy and civil war is contingent on development, using Gurr's Executive Constraints, Vanhanen's Polyarchy and Gates et al.'s MIRPS variables as measures of democracy, and GNP per capita, percent literacy in the population, and the value of min- erals exports as a share of total exports as indicators of development. I find quite strong evidence that democracy is correlated with civil peace only for developed countries, and for countries with high levels of literacy. Conversely, I find that the risk of civil war decreases with development only for democratic countries.

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This paper examines the puzzle that human beings adopted agriculture indepen-dently at least seven and perhaps up to ten times independently in different parts of the world around ten thousand years ago, in spite of the fact that skeletal evidence suggests that the first farmers suffered worse health and nutrition than their hunter gatherer predecessors. It proposes an explanation based on investments in defence, which would have been more necessary for farmers (who being sedentary would have had more resources to defend), but which in turn made them an increased threat to their neighbours. This would have made adoption more attractive among communi-ties whose neighbours had already adopted, leading to a snowball effect of adoption but not necessarily making the first farmers better off than they were before. As well, as developing a formal model of this interaction, the paper examines a range of ethnographic and archaeological evidence in support of this explanation.