Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19026
Authors: 
Falkinger, Josef
Grossmann, Volker
Year of Publication: 
2005
Series/Report no.: 
CESifo working papers 1562
Abstract: 
This paper develops a model in which the interaction of entrepreneurial investments and power of the owners of land or other natural resources determines structural change and economic development. A more equal distribution of natural resources promotes structural change and growth through two channels: First, by weakening oligopsony power of owners and thereby easing entrepreneurial investments for credit-constrained individuals whose investment possibilities depend on their income earned in the primary goods sector. Second, by shifting the distribution of political power from resource owners towards the entrepreneurial elite, resulting in economic policy and institutions which are more conducive to entrepreneurship and productivity progress. We argue that these hypotheses are consistent with a large body of historical evidence from the Americas and with evidence on transition economies.
Subjects: 
credit constraints
distribution
economic development
entrepreneurship
institutions
oligopsony power
political elites
JEL: 
H50
O10
Document Type: 
Working Paper

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