The Curse of Historic Resources

Abstract

There is a well-documented “natural resource curse” whereby the presence of immobile natural resources leads to weaker economic performance and a deterioration in the quality of economic institutions and governance. We propose the novel hypothesis that a similar curse exists for historic resources such as the Egyptian Pyramids, Roman Colosseum, and Gettysburg Battlefield. These captive wealth-producing resources are also immobile and cannot flee from oppressive or inefficient government policies, enabling governments to levy high taxes, impose burdensome regulations, and expropriate property for preservation. Historic resources are therefore also associated with weaker economic performance, increased government corruption, and lower economic freedom.