It is commonly accepted that resource-rich economies tend to fail in
accelerating growth because of various adverse effects of abundant natural
resources, such as Dutch disease and rent seeking. Using the latest crosscountry
data, this study empirically readdresses the question of whether
resource abundance can contribute to growth. It finds that governance
determines the extent to which the growth effects of resource wealth can
materialize. In developing countries in particular, the quality of regulation, such
as the predictability of changes of regulations, and anticorruption policies, such
as transparency and accountability in the public sector, are most important for
effective natural resource management and growth. The paper also attempts to
interpret the theme and results in the context of Botswana, which is endowed
with abundant natural resources but has experienced the most remarkable
economic performance in the region.