Algeria and the natural resource curse: oil abundance and economic growth

The question of the relevance of human and natural capital, as well as the potential adverse effect of natural capital on economic growth, has gained increased attention in development economics. The aim of this paper is to theoretically and empirically assess the relevance of several forms of capital on economic growth in small economies that are dependent upon tourism or natural resources. The empirical framework is based on Impulse Response Functions obtained from Vector Autoregressive models in which we focus on the model where economic growth is the dependent variable for ten small economies that are dependent upon either tourism or natural resources. We find that there is evidence of the ‘’natural resource curse’’, especially in the economies that have a strong dependence on resources that are easily substitutable and whose prices constantly fluctuate. We further find that in the majority of observed cases the type of capital these small economies are most dependent on for their economic growth causes negative impulses in the majority of the observed periods. The main policy recommendation should be to assure that even these small economies should strive towards further diversification and avoid dependence on only one segment of their economy.

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PENGARUH MINYAK DAN GAS TERHADAP KINERJA PERTUMBUHAN EKONOMI REGIONAL: SEBUAH KUTUKAN ATAU ANUGERAH?

EKUITAS (Jurnal Ekonomi dan Keuangan) ◽

10.24034/j25485024.y2018.v2.i2.3940 ◽

2018 ◽

Vol 2 (2) ◽

pp. 184-202

Author(s):

Ahmad Fahriza ◽

Djoni Hartono

Keyword(s):

Economic Growth ◽

Natural Resources ◽

Natural Resource ◽

Oil And Gas ◽

Resource Curse ◽

Natural Resource Curse ◽

Natural Oil ◽

Oil And Gas Resources ◽

Per Capita ◽

Using Data

Natural resources, particularly oil and gas, are great benefit to the region that owns it and become one of the region's revenue sources. Nevertheless, Sachs and Warner (1995) found a phenomenon of natural resource curse indicating that the wealth of natural resources could hamper the economic growth. This research tries to see the existence of natural resource curse phenomenon in Indonesia through the performance of regional economic growth; and observes the differences of oil and gas contribution in the economic structure as an indicator of natural resource wealth in the area. Gross Regional Domestic Product Growth (PDRB) per capita without oil and gas is an indicator of the economic growth to see if the oil and gas are inhibiting or accelerating the growth of other sectors in the region's economy. Using data from 33 provinces in Indonesia within the period of 2006-2013, this study found a positive relationship between oil and gas contribution and per capita GDP growth without oil and gas. Based on these findings, natural oil and gas resources have become a boon to the province that owns them.

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A Multivariate VAR Model for Evaluating Sustainable Finance and Natural Resource Curse in West Africa: Evidence from Nigeria and Ghana

Sustainability ◽

10.3390/su13052847 ◽

2021 ◽

Vol 13 (5) ◽

pp. 2847

Author(s):

Olatunji Abdul Shobande ◽

Joseph Onuche Enemona

Keyword(s):

Natural Resource ◽

Critical Role ◽

Resource Curse ◽

Policy Implications ◽

Vector Autoregressive ◽

Natural Resource Curse ◽

Cointegration Tests ◽

Sustainable Finance ◽

Private Investors ◽

Sustainable Financing

The financial sector plays a critical role in society by mediating resources and assets within the economy between surplus and deficit units. Therefore, they have a great responsibility for the sustainability and prosperity of natural endowments. This study aimed to determine whether sustainable finance matters for the natural resource curse in Nigeria and Ghana. The empirical evidence is based on the Bayer and Hanck combined cointegration tests and Vector Autoregressive/Vector Error Correction Granger causality tests. The study highlights the importance of sustainable financing in natural resources management. Our findings also confirmed the existence of the financial resource curse in Nigeria and Ghana. Likewise, the medium through which sustainable finance affects the natural resource curse has been identified as the human development index (economic welfare). This current study has critical policy implications that suggest the need to establish a vibrant, sustainable financing strategy to assist domestic private investors with a strong interest in natural resource exploration and development, taking into account macroeconomic sustainability. Additionally, it also important to build a strong financial market which allows for policies designed to promote natural resource management.

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