Question number 3 (33.3 points) - 500 words Figure 2 below is generally taken as empirical evidence of the so-called natural resource curse. Figure 2 B 6 Singapore . Korea Taiwan Hong Kong Malta Botswana . Indonesia Cyprus Mauritius Iceland Malaysia 8. Nigeria Algeria Fy Gambia Real GDP Growth Per-capita 1970-1989 Gabon Mauritania Venezuela Bahrain Saudi Arabia Cote D'Ivoire Chad Niger Nicaragua Iran Guyana Zambia Liberia United Arab Emirates -6 Kuwait -8 0 10 20 60 70 80 30 40 50 Exports of Natural Resources, in percent of GDP, 1970 Fig. 1. Growth and natural resource abundance 1970-1989. (a) Taking inspiration from Figure 2, what does the term natural resource curse stand for in the economic literature? (5 points) (b) Outline the various ways through which, according to the economic literature, it can materialise (13.3 points) (c) It is often claimed that good institutions may represent a solution to the natural resource curse and may transform natural resource abundance from being a curse into a blessing. Which institutions, as discussed during lectures, may impede the natural resource curse to take place? (10 points) (d) Can institutions be effectively taken as exogenous factors that may favour a proper exploitation of natural resources or are they endogenous to the process of economic development? (5 points)