Natural resource rents and economic growth in the top resource-abundant countries: A PMG estimation

2018 ◽  
Author(s):  
Ousama Ben-Salha ◽  
Hajer Dachraoui ◽  
Maamar Sebri
Keyword(s):  
Economic Growth ◽  
Natural Resource ◽  
Resource Rents ◽  
Natural Resource Rents

scholarly journals Short-term effects of national-level natural resource rents on life expectancy: A cross-country panel data analysis

PLoS ONE ◽  
2021 ◽  
Vol 16 (5) ◽  
pp. e0252336
Author(s):  
Isaac Lyatuu ◽  
Georg Loss ◽  
Andrea Farnham ◽  
Mirko S. Winkler ◽  
Günther Fink
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Natural Resources ◽  
Population Health ◽  
Natural Resource ◽  
Short Term ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
Cross Country ◽  
The Relationship

While a substantial amount of literature addresses the relationship between natural resources and economic growth, relatively little is known regarding the relationship between natural resource endowment and health at the population level. We construct a 5-year cross-country panel to assess the impact of natural resource rents on changes in life expectancy at birth as a proxy indicator for population health during the period 1970–2015. To estimate the causal effects of interest, we use global commodity prices as instrumental variables for natural resource rent incomes in two-stage-least squares regressions. Controlling for country and year fixed effects, we show that each standard deviation increase in resource rents results in life expectancy increase of 6.72% (CI: 2.01%, 11.44%). This corresponds to approximately one additional year of life expectancy gained over five years. We find a larger positive effect of rents on life expectancy in sub-Saharan Africa (SSA) compared to other world regions. We do not find short-term effects of rents on economic growth, but show that increases in resource rents result in sizeable increases in government revenues in the short run, which likely translate into increased spending across government sectors. This suggests that natural resources can help governments finance health and other development-oriented programs needed to improve population health.

scholarly journals The Dynamic Impact of Natural Resource Rents, Financial Development, and Technological Innovations on Environmental Quality: Empirical Evidence from BRI Economies

2021 ◽  
Vol 19 (1) ◽  
pp. 130
Author(s):  
Siming Zuo ◽  
Mingxia Zhu ◽  
Zhexiao Xu ◽  
Judit Oláh ◽  
Zoltan Lakner
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Environmental Quality ◽  
Natural Resource ◽  
Low Income ◽  
Ecological Footprint ◽  
Technological Innovations ◽  
Middle Income ◽  
Resource Rents ◽  
Natural Resource Rents

Until recently, many countries’ policies were motivated by economic growth; however, few strategies were developed to prevent environmental deterioration including reducing the ecological footprint. In this context, the purpose of this study was to analyze the role of natural resource rents, technological innovation, and financial development on the ecological footprint in 90 Belt and Road Initiative (BRI) economies. This research divided the BRI economies into high income, middle-income, and low-income levels to capture income differences. This research used the second-generation panel unit root, cointegration, and augmented mean group estimators to calculate the robust and reliable outcomes. Based on the annual data from 1991 to 2018, the findings show that natural resource rents drastically damage the quality of the environment, whereas technological innovations are helpful in reducing ecological footprint. Moreover, the outcome of the interaction term (natural resource rents and technological innovations) negatively impacts the ecological footprint. Interestingly, these findings were similar in the three income groups. In addition, financial development improved environmental quality in the middle-income BRI economies, but reduced it in high-income, low-income, and full sample countries. Furthermore, the Environmental Kuznets Curve (EKC) concept has been validated across all BRI economies. Policymakers in BRI countries should move resources away from resource-rich sectors of industries/manufacturing sectors to enhance/promote economic growth and use these NRRs efficiently for a progressive, sustainable environment. Based on these findings, several efficient policy suggestions are proposed.

scholarly journals ESSAYS ON THE DUTCH DISEASE

2021 ◽  
Author(s):  
Nazanin Behzadan
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Exchange Rate ◽  
Income Distribution ◽  
Foreign Aid ◽  
Natural Resource ◽  
Dutch Disease ◽  
Equal Distribution ◽  
Resource Rents ◽  
Natural Resource Rents

In this dissertation I analyze the effect of within-country income inequality on economic outcomes. I develop a new model of international trade with non-homothetic preferences whereby within-country income distribution affects the pattern of trade and economic growth. An appreciation of the real exchange rate inducing a production shift to the sector with less long-run growth potential is known as the Dutch disease and in this model the disease is triggered by within-country income differences. First, I show that the Dutch disease can arise solely from inequality in the distribution of natural resource rents where the country with the less equal distribution will have less production of manufacturing goods and less development of learning-by-doing in this sector. As opposed to conventional models, where income distribution has no effect on economic outcomes, an unequal distribution of the resource wealth can generate the Dutch disease. In addition, alternative forms of foreign transfers, such as foreign aid and remittances, interact with the income distribution in dissimilar manners and generate differences in spending patterns, the real exchange rate, production patterns, and the pattern of international trade. I show that while foreign aid can cause economic stagnation, remittances can in fact foster economic growth. I also provide a range of empirical tests of the theoretical model, including both difference and system GMM estimations in a dynamic panel setting and disentangle the effects of inequality and institutional quality. My empirical analyses support the hypothesis that inequality indeed plays a significant role in whether being resource-rich is a blessing or a curse for a country. The more unequal is the distribution of natural resource rents, the stronger is the disease. Moreover, I verify my hypothesis that foreign aid and remittances are not similar in generating the Dutch disease using data from a panel of countries and industries covering the years 1991-2009 while controlling for the issues of omitted variable bias and the endogeneity of the transfers. Finally, a similar method is used in order to draw empirical evidence that lends credence to the positive relation between more equal distribution of resource rents and higher manufacturing growth.

scholarly journals ESSAYS ON THE DUTCH DISEASE

2021 ◽  
Author(s):  
Nazanin Behzadan
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Exchange Rate ◽  
Income Distribution ◽  
Foreign Aid ◽  
Natural Resource ◽  
Dutch Disease ◽  
Equal Distribution ◽  
Resource Rents ◽  
Natural Resource Rents

In this dissertation I analyze the effect of within-country income inequality on economic outcomes. I develop a new model of international trade with non-homothetic preferences whereby within-country income distribution affects the pattern of trade and economic growth. An appreciation of the real exchange rate inducing a production shift to the sector with less long-run growth potential is known as the Dutch disease and in this model the disease is triggered by within-country income differences. First, I show that the Dutch disease can arise solely from inequality in the distribution of natural resource rents where the country with the less equal distribution will have less production of manufacturing goods and less development of learning-by-doing in this sector. As opposed to conventional models, where income distribution has no effect on economic outcomes, an unequal distribution of the resource wealth can generate the Dutch disease. In addition, alternative forms of foreign transfers, such as foreign aid and remittances, interact with the income distribution in dissimilar manners and generate differences in spending patterns, the real exchange rate, production patterns, and the pattern of international trade. I show that while foreign aid can cause economic stagnation, remittances can in fact foster economic growth. I also provide a range of empirical tests of the theoretical model, including both difference and system GMM estimations in a dynamic panel setting and disentangle the effects of inequality and institutional quality. My empirical analyses support the hypothesis that inequality indeed plays a significant role in whether being resource-rich is a blessing or a curse for a country. The more unequal is the distribution of natural resource rents, the stronger is the disease. Moreover, I verify my hypothesis that foreign aid and remittances are not similar in generating the Dutch disease using data from a panel of countries and industries covering the years 1991-2009 while controlling for the issues of omitted variable bias and the endogeneity of the transfers. Finally, a similar method is used in order to draw empirical evidence that lends credence to the positive relation between more equal distribution of resource rents and higher manufacturing growth.

Foreign Capital, Natural Resource Rents and Financial Development: A New Approach

2020 ◽  
pp. 097215092096136
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Ali Aboutorabi ◽  
Farzaneh Ahmadian Yazdi
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Capital Accumulation ◽  
Foreign Capital ◽  
New Approach ◽  
Resource Rents ◽  
Long Run ◽  
Natural Resource Rents ◽  
Rich Countries ◽  
The Impact

This article explores the impact of financial development on the ‘natural resources rents–foreign capital accumulation nexus’ in selected natural resource–rich countries during 1970Q1–2016Q4. In doing so, we propose a new approach by applying the autoregressive distributed lag (ARDL) rolling regression technique for our empirical purpose. The results show that financial development has a positive and significant effect on the way natural resource rents affect foreign capital in the case of Australia, Chile, Ecuador, Egypt and Peru in both the short run and the long run. We achieve the same results in the case of Colombia and Iran too, but just in the long run. Also, short-term and long-term negative effects of financial development on the rents–foreign capital nexus are witnessed just in the case of Algeria. We provide some empirical evidence for further robustness of our findings. Finally, we suggest that there is a necessity for the development of the financial system in natural resource–rich countries to reach higher levels of foreign capital, which has a crucial role in their economic growth.

Growth Recoveries (from Collapses)

2021 ◽  
Author(s):  
Juan Francisco Meneses ◽  
José Luis Saboin
Keyword(s):  
Exchange Rate ◽  
Natural Resource ◽  
Exchange Rate Regime ◽  
Democratic Accountability ◽  
Resource Rents ◽  
Financial Account ◽  
External Conditions ◽  
Economic Collapse ◽  
Low Levels ◽  
Natural Resource Rents

This paper analyzes the behavior of a long list of economic variables during episodes of recovery from an economic collapse. A set of stylized facts is proposed so as to depict what in this work is called \saygrowth recoveries. Through different estimation techniques, it is inferred under which conditions and policies the likelihood of experiencing a growth recovery increases. The results of the paper indicate that collapses tend to occur in countries with high dependence on natural resource rents, macroeconomic mismanagement, low levels of democratic accountability and rule of law and high levels of conflict. Recoveries, on the other hand, tend to be longer than collapses and are more likely to occur in contexts of: improved external conditions, less natural resource rents, balanced fiscal accounts, where the exchange rate corrects but within a more fixed exchange rate regime and a more restricted financial account, and where there are: rebounds in private consumption, increases in international trade and improvements on property rights.

Natural resource rents, political regimes and terrorism in Africa

2020 ◽  
Vol 162 ◽  
pp. 50-66 ◽  
Author(s):  
Kazeem B. Ajide ◽  
Juliet I. Adenuga ◽  
Ibrahim D. Raheem
Keyword(s):  
Natural Resource ◽  
Political Regimes ◽  
Resource Rents ◽  
Natural Resource Rents

Nigerian Governance Challenge: Exploring the Role of Natural Resource Rents

2020 ◽  
Vol 12 (3) ◽  
pp. 335-358
Author(s):  
Fisayo Fagbemi ◽  
Grace Omowumi Adeoye
Keyword(s):  
Natural Resource ◽  
Good Governance ◽  
Political Commitment ◽  
Causality Test ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Resource Wealth ◽  
Natural Resource Rents ◽  
Natural Resource Wealth

Nigeria is a glaring example of a country where weak public institutions are pervasive in spite of its huge natural resource wealth. The presence of natural resource abundance has exacerbated the overwhelming development challenge in the economy. While the upshot of most empirical findings of the resource impact covers how the growth path is determined through the channel of institutions, the question as to why resource rents often fail to stimulate improved governance is more critical than ever. Hence, the study examines the effect of natural resource rents on the quality of governance in Nigeria for the period 1984–2017, using ARDL bounds test approach, Dynamic Least Squares (DOLS), and Granger Causality test based on Vector Error Correction Model (VECM). Results reveal that natural resource rents have an insignificant effect on governance indicators in the long-run as well in the short-run, suggesting that natural resource windfalls have a shallow effect on the development of good governance. However, further evidence indicates that pervasive institutional gaps in Nigeria could be stimulated or caused by the overdependence on natural resource rents and entrenched mismanagement tendencies. Thus, the study suggests that maintaining strong political commitment, curtailing overdependence on natural resources, and ensuring sound management of natural resource wealth are central for improved governance.

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