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July 2002
Recent literature argues that natural resource abundance is likely to be bad for economic growth. This paper provides a counterargument by highlighting examples of successful resource-based development. The first is historical: the United States from the mid-nineteenth century to the mid-twentieth. We show that U.S. mineral abundance was an endogenous historical phenomenon driven by collective learning, increasing returns, and an accommodating legal environment. Recent instances of successful resource-based growth affirm that so-called �nonrenewable� resources can be progressively extended through exploration, technological progress, and investments in appropriate knowledge. Indeed, minerals constitute a high-tech knowledge industry in many countries.