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.

Dutch Disease phenomenon and demand for international business travels: Panel ARDL/PMG estimation

2021 ◽  
pp. 135481662098313
Author(s):  
Hassan F Gholipour ◽  
Reza Tajaddini ◽  
Usama Al-mulali
Keyword(s):  
International Business ◽  
Natural Resource ◽  
Positive Impact ◽  
Dutch Disease ◽  
Annual Data ◽  
Panel Ardl ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents

This article explores the long-run and short-run effect of natural resource rents on inbound and outbound business travels in resource-abundant economies. By applying panel ARDL/PMG models for 25 countries with annual data for 2005–2017, our results show that increases in dependency on natural resources lead to lower demand for inbound and outbound business travels in the long run. The short-run analyses indicate that while natural resource rents have a significant and positive impact on outbound business travels, they do not affect inbound business travels.

Natural Resource Rents-Capital Flight Nexus in Selected ECOWAS Countries: Evidence from Non-Linear ARDL Approach

2021 ◽  
Vol 10 (2) ◽  
pp. 81-97
Author(s):  
Abdulfatai A Adedeji ◽  
Sherifat W Kogbodoku
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Capital Flight ◽  
Asymmetric Effect ◽  
Distributed Lag ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents ◽  
Symmetric Effect

The challenge of capital flight in the ECOWAS sub-region is worrisome. Huge revenue from natural resources also contributes to the relocation of available resources necessary for the development of the region. The study identifies the revenue from natural resources as a key driver of capital flight in the region. Hence, this study analyzed the effect of natural resource rents on capital flight in ECOWAS countries accounting for the role of asymmetry. Also, the study employed the nonlinear autoregressive distributed lag (NARDL) model to account for short-run and long-run asymmetries. The results revealed the presence of asymmetry in five countries, while two countries displayed symmetric effects. It also showed that the symmetric effect of natural resource rents on capital flight is weak for Guinea and Nigeria in the short-run while the long-run effect is not more pronounced for Nigeria. In the case of asymmetric effect, natural resource rents amplified capital flight in Cape Verde and Sierra Leone. Further evidence shows that the non-linearity of natural resource rents does not encourage capital flight in Burkina Faso, Cote d’Ivoire, and Ghana. Hence, the countries should promote transparency and accountability in the management of proceeds from natural resources to enhance development in the region.

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.

scholarly journals What Turns a Blessing into a Curse? The Political Economy of Natural Resource Wealth (Invited Lecture)

2007 ◽  
Vol 46 (4I) ◽  
pp. 351-377 ◽  
Author(s):  
Syed Mansoob Murshed
Keyword(s):  
Political Economy ◽  
Developing Countries ◽  
Natural Resource ◽  
Growth Failure ◽  
Institutional Development ◽  
Rent Seeking ◽  
Resource Rents ◽  
Resource Endowment ◽  
Resource Wealth ◽  
Natural Resource Wealth

I review the relationship between natural resource endowment type and economic growth in developing countries. Certain types of natural resources, such as oil and minerals, tend to exhibit concentrated production and revenue patterns, while revenue flows from other resources such as agriculture are more diffuse. Most developing countries that export products from the first group have been prone to growth failure in recent times. The most important channels are political economy mechanisms, where there are negative relationships between natural resource rents and institutional development. An explicit model of growth collapse with micro-foundations in rent-seeking contests that have increasing returns in rent-seeking outlays is presented.

Oil income and the personalization of autocratic politics

2019 ◽  
Vol 8 (4) ◽  
pp. 772-779 ◽  
Author(s):  
Matthew D. Fails
Keyword(s):  
Natural Resource ◽  
Resource Extraction ◽  
Resource Rents ◽  
Resource Wealth ◽  
Direction Of Causation ◽  
Natural Resource Rents ◽  
Autocratic Politics ◽  
Important Evidence

AbstractPersonalist regimes are more reliant on natural resource rents than other models of autocracy, but the direction of causation is unclear. Resource wealth could finance patronage and allow leaders to skip construction of institutionalized systems of rule, leading to more personalized autocracies. Conversely, personalist leaders may increase resource extraction, since diversifying the economy could increase the power of rivals. I use data on the degree of personalism and level of oil income to disentangle these interpretations. The results show that increases in oil income are associated with subsequent increases in personalism within autocracies. Since personalist regimes are less likely to successfully democratize, the results also provide important evidence as to why oil impedes democracy.

scholarly journals Good governance

2020 ◽  
Author(s):  
Somayeh Sedighi ◽  
Miklós Szanyi
Keyword(s):  
Exchange Rate ◽  
Natural Resources ◽  
Natural Resource ◽  
Good Governance ◽  
Development Rate ◽  
Resource Rents ◽  
Slow Development ◽  
Manufacturing Sectors ◽  
Natural Resource Rents ◽  
Rich Countries

Resource-rich countries experience a slow development rate in manufacturing sectors compared to countries with scarce resources. it has been a challenge to demystify the slow development in manufacturing sectors in those countries, therefore this study aimed to develop an efficient model to estimate the effects of good governance and natural resource rents on the performance of manufacturing export in countries endowed in natural resources. In this study world bank data for the year, 2000 to 2016 and the panel data model from 14 countries rich in natural resources were used alongside the six dependent variable indices including good governance, natural resource rents, real exchange rate, and gross domestic product (GDP). The results revealed that an increase in natural resources (NR), rule of low (RL), control of corruption (CC) as well as a reduction in inflation (INF) in countries under investigation will lead to increase in Manufacturing export. As well as an increase in Real Exchange Rate (RER) will lead to a reduction in the Manufacturing export of these countries. Hence demystify the slow development rate in manufacturing sectors in resource-rich countries.

scholarly journals A cross-national study of the association between natural resource rents and homicide rates, 2000–12

2016 ◽  
Vol 14 (4) ◽  
pp. 393-414 ◽  
Author(s):  
Paul B. Stretesky ◽  
Michael A. Long ◽  
Michael J. Lynch
Keyword(s):  
Natural Resource ◽  
Growth Models ◽  
National Study ◽  
Homicide Rates ◽  
Natural Resource Extraction ◽  
Resource Rents ◽  
Long Run ◽  
Natural Resource Rents ◽  
Cross National Study ◽  
Level 2

Countries that rely on natural resource rents (that is, the revenue generated from the sale of natural resources) may suffer from a variety of social problems. This exploratory study reviews the natural resource extraction literature to derive a ‘natural resource rents–homicide’ hypothesis. Data for 173 countries for the years 2000 to 2012 are examined to determine if there is a correlation between natural resource rents and homicide rates. Multilevel growth models suggest that natural resource rents are positively correlated with homicide rates within countries (level 1) but not between them (level 2). Importantly, the correlation between natural resource rents and homicide is strongest when natural resource rents are lagged. We conclude by suggesting that increasing natural resource rents may be counterproductive over the long run and sow the seeds for a future increase in homicide.

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