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The Development Effects of Natural Resources: A Geographical Dimension

48 Pages Posted: 29 Jan 2012  

Fabrizio Carmignani

UN Economic Commission for Europe - Economic Analysis Division

Abdur Chowdhury

Marquette University - Department of Economics; United Nations - Economic Commission for Europe

Date Written: November 27, 2011

Abstract

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.

Keywords: Development, Sub-Saharan Africa, natural resources, disease, institutions, human capital

JEL Classification: O11, O55, Q28

Suggested Citation

Carmignani, Fabrizio and Chowdhury, Abdur, The Development Effects of Natural Resources: A Geographical Dimension (November 27, 2011). William Davidson Institute Working Paper No. 1022. Available at SSRN: https://ssrn.com/abstract=1993267 or http://dx.doi.org/10.2139/ssrn.1993267

Fabrizio Carmignani

UN Economic Commission for Europe - Economic Analysis Division ( email )

Room 441
Palais des Nations
1211 Geneva 10
Switzerland

Abdur Chowdhury (Contact Author)

Marquette University - Department of Economics ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

United Nations - Economic Commission for Europe ( email )

Palais des Nations
Geneva
Switzerland

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