ABSTRACT

The conventional view concerning the role of natural resources in economic development has been that the resource endowment is most critical in the early low-income stages of the development process. It assumes that, as development proceeds and a population acquires more and more skills, those skills are deployed with increasing effectiveness to counteract any resource deficiency (Ginsburg 1957). For example, Maddison (1991) notes that although the resource advantage of Australia and North America influenced their total gross domestic product (GDP) rate of growth by attracting a large inflow of migrants, its influence on per capita GDP levels and rates of growth has been declining over the long term. Moreover, Maddison notes that Australia has a lower per capita income than Japan despite the fact that its per capita resources (based upon land area as a proxy for resource endowment) are 150 times those of Japan and that it also secured a head start in economic development.