Abstract—Mongolia is one of the richest countries in the
world in terms of mineral endowments, and its medium and
long-term outlook of the growth seem favorable. Even though
mining sector development is likely to create opportunities for
high economic growth in Mongolia, there have been several
issues that need to be taken into consideration such as the
impact of Dutch disease and the resource curse. According to
the political risk index by the ICRG, the level of the Mongolian
institutional quality is closer to the countries recognized as
struggling with the curse of natural resources, which indicates
that there is high potential for the rent seekers or corruption
activities are likely to increase. Therefore, it is anticipated that
the mining boom is having a negative impact on the Mongolian
economy in line with resource curse theory. In other words,
unless the government takes measures to improve governance
and strengthen institutions in the country including
implementing an effective anticorruption framework, the
Mongolian economy is expected to be trapped in a resource
curse, instead of being blessed with its new mineral wealth.
Index Terms—Mongolia, resources curse, institutions, wolf
economy.
The authors are with the Institute of Finance and Economics, Ulaanbaatar,
13381 Mongolia (e-mail: tuvshinjargal.d@ife.edu.mn,
avraltod@email.arizona.edu).
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Cite: D. Tuvshinjargal and P. Avralt-Od, "The Wolf Economy and Natural Resource Trap," Journal of Economics, Business and Management vol. 3, no. 8, pp. 812-819, 2015.