The Development Effects of Natural Resources: A Geographical Dimension
UN Economic Commission for Europe - Economic Analysis Division
Marquette University - Department of Economics; United Nations - Economic Commission for Europe
November 27, 2011
William Davidson Institute Working Paper No. 1022
Despite the recent growth resurgence, Sub-Saharan Africa (SSA) remains the poorest region in the world. At the same time, it is a region that heavily relied on natural resources. In this paper we investigate the extent to which the second fact helps explain the first one. The distinctive feature of our study is that we take a geographical perspective and allow the effect of natural resources to differ across regions of the world. Our findings suggest that (i) the effect of natural resource intensity on per-capita income is positive and significant in general, but almost negligible and possibly negative in SSA, (ii) natural resources have a negative effect on institutional quality in SSA only, (iii) natural resources hinder human capital accumulation in SSA much more than anywhere else, and (iv) the combination of bad disease environments and large resource endowments accounts for most of the observed cross-regional differences in the effect of natural resources.
Number of Pages in PDF File: 48
Keywords: Development, Sub-Saharan Africa, natural resources, disease, institutions, human capital
JEL Classification: O11, O55, Q28
Date posted: January 29, 2012
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