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PurposeThis paper aims to examine the role of economic integration and natural resources and foreign direct investment (FDI) complementarity in explaining economic growth in the Southern African Development Community (SADC).Design/methodology/approachThe study employed the ordinary least square-random effects and the generalized two-stage least square instrumental variables (IV) regression to examine the relationship between the variables.FindingsThe authors find that regional economic integration and natural resource abundance are essential for promoting economic growth. The results further show a potential resource curse phenomenon, offset by the complementary effect of FDI in resource-rich countries. The findings are robust after conditioning for different measures of institutional quality.Practical implicationsThe findings suggest the need for deeper regional trade integration and international cooperation, prudent natural resource management and concerted effort toward economic diversification.Originality/valueMany studies have examined the determinants of economic growth in the Southern African Development Community (SADC). However, these studies did not incorporate or assess the potential of economic integration in the region. Moreover, studies that examined the growth effects of FDI did not assess the complementary role of the region's natural resource endowment which potentially drives FDI inflows. This study fills these gaps and provides a robust analysis of economic growth drivers in the region.

The resource curse literature shows that natural resources, particularly oil, help regime or leadership survival, but it also suggests that resource-rich countries are prone to civil wars or political instability. This article argues that the ownership structure of the oil sector matters and influences leadership survival. Specifically, foreign ownership of the oil sector raises leaders’ survival prospect and leads to more military interventions aimed to help the leader. Using data on oil ownership and leaders from 1962 to 2006 across 120 developing countries, this article finds that foreign involvement in the oil sector has a negative effect on leadership turnover. Countries with deeper foreign involvement in the oil sector are also more likely to experience military interventions on the side of the leaders. In other words, leaders of oil-producing countries do receive political support when they cooperate with and serve as ‘petro-friends’ to foreign powers.

The ‘resource curse’ associated with natural resource abundance has long been a subject of study across multiple disciplines. Though much research has focused on possible effects of resource wealth on the formal economy, little is known about how such wealth affects the informal sector, a substantial portion of global economic activity. We posit that resource windfalls directly contribute to growth in the informal economy, as investment and spending patterns associated with such revenues limit opportunities within the formal sector and thus channel more labor and businesses into the informal sector. We test these claims across a panel of over 120 countries for the period 1985 to 2012. Across multiple model specifications, we find that resource wealth growth is associated with increased informal economic activity.

Purpose This study aims to explore the institutional complexities associated with the design and implementation of a natural resource fund for innovation. Design/methodology/approach This study examines the case of Chile's Innovation Fund for Competitiveness by means of a historical approach building on interviews with key informants. Findings The proper functioning of a natural resource fund for innovation requires efficient institutional and operational structures, as well as strong coordination with innovation system actors. In particular, the case of Chile highlights the challenges inherent in adopting a regional approach when implementing this type of strategy, due to the institutional voids that hamper the role of regional governments in emerging countries. Originality/value Natural resource funds for innovation constitute a strategic mechanism for developing the innovative capabilities necessary to enhance the competitiveness of resource-rich emerging countries. This is one of the first studies addressing the institutional challenges involved in setting up this kind of fund in practice, focusing on one of the most relevant and longstanding examples from Latin America.

When and for what reason do governments choose to monopolize violence and consolidate power? Theory suggests three channels: when the government has coercive power against the opposition, if it shifts the distribution of power in its favor, and when contingent spoils are large. Using international oil price shocks and a novel dataset on oil-producing local government areas, this article examines how commodity prices affect civil conflict in Nigeria. Results show that a rise in oil price leads to a more than proportionate increase in government attacks on rebel groups in the oil region. The findings are consistent with the theoretical predictions: positive oil price shocks increase the monopoly of violence by the government through an increase in coercion, a rise in regaining territories from rebel groups, and an increase of violence in areas with large oil fields.

Following a rise in the price of oil in the 1970s, a number of developing countries received a significant boost in foreign transfers as oil producers could not absorb all of their new rents domestically. When those transfers ended, some recipients of these transfers eventually democratized as part of the ”Third Wave” while others languished as violent autocracies. This raises a puzzle: how can declines in external transfers foster democratization in some cases, but heighten political violence in others? We develop a formal model to reconcile this tension and demonstrate that autocratic incumbents can become more repressive with higher levels of transfers and either experience civil conflict or democratize at lower levels of transfers. We characterize these dynamics as a ”political transfer problem” and then use case studies and econometric evidence to argue that the largest windfall of the 20th century, the period from 1973–85 during which oil prices were at all-time highs, and its aftermath, produced political dynamics consistent with our model.

Resource curse mineral driven conflicts have taken a major toll in the African continent. Observably, most of the studies which have been conducted do not address major aspects such as the internat...

Peru is the second-largest producer and exporter of copper in the world. This paper proposes a novel approach to assess short-run and long-run effects of copper on Peru’s recent economic growth. Annual data over the 2014–2018 period were used to calculate a Mining Contribution Index (MCI). An institutional quality indicator of the World Competitiveness Index of the World Economic Forum measured the dependence of Peruvian economic growth on mining and the quality of its institutions, respectively. Then, monthly data during the period 2005–2018 were used to run vector autoregressive (VAR) and vector error correction (VEC) models to measure copper’s effects on the country’s economy over time. VAR-VEC models included copper production, exports, international price, investment, taxes paid by producing companies, and Peru’s gross domestic product (GDP). Stationarity and causality of variables were verified with the Augmented Dickey-Fuller and Granger tests, respectively. Due to the presence of non-stationary variables, a VEC model was implemented to forecast short- and long-run effects. The main results show that real GDP responds to copper output and other related explanatory variables differently, depending upon the instrument applied. Peruvian GDP has increased dependence on copper mining. The quality of its institutions could explain the presence of Dutch Disease or resource curse theory. Short- and long-run effects of copper output on GDP were generally statistically non-significant. GDP was statistically significant in relation to other mining variables, such as copper exports and the international price of copper.

The housing booms and busts in Ireland and Spain were among the most striking episodes of the Eurozone crisis. While asset price inflation and financialization of housing was gathering pace across the developed world, these two ‘most different’ cases converged on the same outcome as the most extreme forms of construction-based bubbles. The key contributions of this paper are threefold. Firstly, we show how cheap credit can be understood as analogous to a natural resource such as oil: resource abundance generates a ‘paradox of plenty’ whereby an asset becomes a liability. Secondly, we open the black box of political pathways through which this happens, expanding our understanding of how perverse outcomes are produced. Thirdly, we account for why Spain and Ireland were more susceptible to extreme outcomes than other European countries, thereby extending our understanding of asymmetries in the political economy of the Eurozone.

Based on the ‘resource curse’ theory, this study uses panel data for 256 prefecture‐level cities in China from 2003 to 2016 to test the relationship and mechanism between natural resource dependence and economic development. The panel model and instrumental variable regression results show that natural resources generally promote economic development, but for 109 resource‐based cities, the influence of natural resources on economic development seems quite different. The panel threshold model shows that in the resource‐based cities, (i) resources have a ‘blessing effect’ on economic development during economic prosperity (GDP growth rate is greater than 12.1 per cent); (ii) the relationship is not statistically significant when the GDP growth rate is between 5 per cent and 12.1 per cent; and (iii) when the GDP growth rate is lower than 5 per cent, natural resources have a ‘curse effect’ on economic development. Furthermore, the results of the mediation effect model show that the mediation effect of industrial diversification on the relationship between resource dependence and economic development suppresses the promotion of natural resource on economy. An excessive concentration of resource industries has a crowding‐out effect on non‐resource industries in resource‐based cities, which reduces the level of industrial diversification and is not conducive to economic development.

In this paper we examine the impact of natural resource wealth by focusing on historical coal-mining across European regions. As an exogenous source of variation in coal extraction activities, we rely on the presence of coal-deposits located on the earth’s surface, which historically facilitated the discovery and extraction of coal. Our results show that former coal-mining regions are substantially poorer, with (at least) 10% smaller per-capita GDP than comparable regions in the same country that did not mine coal. We provide evidence that much of this lag is explained by lower levels of human capital accumulation and that this human-capital effect is concentrated in men. Finally, we provide suggestive evidence that the persistently lower levels of human capital in coal mining regions that we document result from the crystallization of negative attitudes towards education and lower future orientations in these regions.

Corruption is considered an important driver of the resource curse in developing countries. Based on a large-scale field experiment in Tanzania, this paper studies how the salience of future natural resource revenues shapes beliefs, attitudes, and behavior. We find some evidence that information about the discovery of natural gas causes people to expect more corruption in the future, but no evidence of the information making people at present more willing to engage in corruption and dishonest behavior or less trusting. The findings do not support the idea of self-fulfilling expectations about future corruption. The paper provides a rich set of results on the determinants of corruption and trust in a development context, which may contribute to a better understanding of the micro-foundations of the resource curse.

Government behavior can be affected by natural resource benefits. Benevolent government and political leaders may use them to improve the welfare of the people, whereas others may use them for their own interests. To examine the effects of oil bonanza on government behavior comprehensively, this study investigates how giant oilfield discoveries affect the size and composition of government expenditure using data from 168 countries between 1972 and 2008. We find weak evidence that giant oilfield discoveries increase total government expenditure significantly in the medium and long term, whereas their effects are more evident in the short term, especially when controlling for other factors affecting total government expenditure. We also obtain evidence that democracy plays a mediating role in these effects; if the democracy level in a country is consolidated, the size of total government spending does not increase even when discovering giant oilfields. Considering each category of government expenditure, giant oilfield discoveries increase expenditure on health and social protection significantly, whereas they decrease educational expenditure. Furthermore, giant oilfield discoveries decrease expenditure on economic affairs and defense and increase general public services and public order and safety. Finally, giant oilfield discoveries increase the net implicit gasoline subsidy in the long term. These findings enhance our understanding of the effects of oil bonanza on government behavior.

In efforts to explain the resource curse, researchers have examined the connection between the resource curse and national corruption. Because being relatively rich in natural resources may encoura...

While most of the literature on natural resources highlights their effect on the growth rate and level of income, this paper shifts the focus toward the distribution of income. Using newly developed dynamic panel co-integration techniques to account for the cross-country heterogeneity, cross-section dependence, and feedback effects in the oil-volatility-inequality nexus, it finds that oil abundance increases human capital investment, improves institutional quality, and hence mitigates income inequality. However, oil volatility has the opposite effects. It accords with the recent trend in the resource curse literature that it is the volatility, rather than the level, of oil that causes the paradox of plenty. The results also shed light on the factors that shape a country's response to its oil richness and volatility and offer policy implications for mitigating detriments associated with oil volatility.

Using a panel dataset of 95 countries from 1980 to 2014, we find that natural resource rents have a causal negative effect on labour shares. This effect is robust to estimation methods and control ...

To understand the divergent institutional development in transition economies, we examine the role of institutional experience from the pre-Soviet era in institution-building after the dissolution ...

This study examines how land lease revenue, a fiscal resource windfall available to local governments, has shaped local tax policy in China. We follow the literature to argue that the presence of resource revenue incentivizes governments to substitute the more distortive tax policy with the resource revenue. Studying a city-level dataset and a large manufacturing firm-level dataset from 2000 to 2013, we find evidence for this argument by showing that land lease revenue available to city governments is negatively associated with the effective tax rates faced by the firms in the cities. Furthermore, we show that the effect of land lease revenue is likely to be weakened in larger cities, cities with more agglomerated industries, and cities with lower capital mobility. Finally, we show that the effect of land lease revenue on tax rates is more salient for firms that are under the direct control of local governments and for firms that have stronger bargaining power with local governments.

Cross-national statistical research based on “all country” data sets involves no deliberate selection and hence ignores the potential for endogenous selection bias. We show that these designs are prone to selection bias if existing units are subject to differential survival rates induced, in part, by treatment. Using rudimentary graph theory, we present survivorship bias as a form of collider bias, which is related to but distinct from selection on the dependent variable. Because collider bias is always relative to a specific causal model, we present a causal model of post-colonial sovereignty on the Arabian Peninsula, show that it implies survivorship bias in the form of false positives with respect to the political resource curse, and provide historical evidence confirming that the model correctly depicts the creation of sovereign countries on the Arabian Peninsula but not elsewhere. When we correct for endogenous selection bias, the effect of oil on autocratic survival is shown to be negligible. The study motivates the need to think more broadly about the nature of the data-generating process when making causal inferences with observational data and to construct statistical models that are sensitive to treatment heterogeneity and rooted in context-specific knowledge and qualitative inferences.

Many countries badly mismanage their natural resource endowments. We argue that a fundamental change in paradigm is needed. Specifically, we advocate treating non-renewable natural resources as a finite shared inheritance asset, and extraction as the sale of the inherited wealth. We identify several proposals that logically derive from treating mineral sale proceeds as intergenerational wealth rather than as revenues that can be spent. Wealth portfolio management suggests that mineral owners must strive for zero-loss when selling minerals, establish a passively invested future generations fund from the proceeds and distribute dividends from that fund to citizens as the rightful owners of the shared inheritance. The current dominant metaphor of proceeds from the exploitation of non-renewable mineral resources as being “windfall revenues” is underpinned by government accounting standards. The “windfall revenue” metaphor is not only inaccurate but also produces several pernicious effects that help explain the poor management of natural resource endowments in so many countries. We do not anticipate that our ideas will quickly overturn centuries of established practice. We do, however, believe that the case needs to be made.

Innovation capacity has become a crucial factor determining the future competitiveness of resource-based cities (RBCs). To realise sustainable development, RBCs need to adopt innovation and a system to initiate the related institutional factors. Traditional methods for evaluating innovation efficiency fail to consider the internal operation processes of the innovation system. In this study, a regional innovation system was deconstructed into two inter-relational chained substages of innovation. This study focuses on a typical resource-based city, Qitaihe, in the Old Northeast Industrial Bases of China. It establishes a non-radial SBM-based superefficiency model to examine technological innovation—of the city's overall efficiency and that of every substage—to better determine the root causes of internal inefficiencies amidst innovation production. The results of this study suggest the following: (1) resources exert an obvious crowding-out effect on innovation, and the technological research and development (RD and (2) to break the ‘resource curse’, RBCs should focus their measures on boosting the efficiency of R&D personnel. This study offers another perspective on China's experience that might be beneficial for other countries.

The socio-economic impacts of past mining were studied at Singkep Island, Indonesia. Tin mining was the only major industry on the island from 1812 to 1992. It contributed around 65% -90% of the local economy, provided 2452 out of 8716 direct jobs, operated 2 out of 39 primary schools, built infrastructure and controlled the hospital, airport, power plant and piped water. After closure, substantial mining benefits turned very quickly into long-term losses. Job opportunities became unemployment, economic contributions became economic collapse, and infrastructure assets became liabilities. Environmental degradation was a negative impact during and after mining. Education was relatively unaffected because most children attended state schools. Poor resource governance during active mining led the island to heavy economic dependence, little economic diversification, and failed to transform the finite natural resources to human capital. These findings challenge the claim that Indonesia has successfully released itself from the resource curse that prevailed in the 1970s-1990s. Most previous research on Indonesia carried out analyses at national scale, while the case of Singkep emphasises the importance of regional studies.

Citizen engagement is one way of improving the governance of extractive resources and overcoming the resource curse. Academic research on Tanzania's extractive resource governance has shown that meaningful offline citizen engagement remains a troubling area mainly because of how it is framed by the government and the measures it takes to suppress organised community initiatives for engagement. Can government use of ICT promote citizen engagement? This paper asks one major question: how do governments deploy ICTs to create and/or constrain opportunities for active citizen engagement in extractives decision-making and governance processes? In answering this question, the paper examines how the Tanzanian government uses ICTs to engage with citizens in extractives decision-making and governance processes and whether this engagement really empowers citizens to influence resource governance decisions. The paper shows that much as the government uses ICT to inform the public about extractives development, it equally takes measures-political and legal- to ensure that meaningful citizen engagement does not evolve. This calls for a nuanced analysis of the potential role of ICT in promoting citizen engagement in governance processes.

Is it possible to reverse the resource curse through institutional reform? Evidence suggests that there is a negative relationship between abundance of natural resources and economic growth, political stability, democracy, and peace. However, evidence illustrating how institutional reform can reverse this situation is scarce. In this paper, we exploit a component of an institutional reform that modified the allocation rule of oil royalties in Colombia and evaluate a set of effects of this reform on the living standards of Colombian households. Using international variations in the price of oil for identification, we find that the reform had important effects on several household welfare indicators. We find positive impacts on important dimensions, such as reductions in multidimensional poverty and improvements on income, employment, housing conditions, health, and education, among others. Results are mixed or null in other outcomes, such as formality or employment in the service sector. Importantly, we find no effects on monetary poverty but larger income effects for rich and urban households. We test for the different channels boosting these effects and provide tentative evidence that supports the role of fiscal and administrative capacity mechanisms.

In this paper, we investigate the link between windfall gains and losses of income associated with commodity exports and economic performance in a panel of 45 sub-Saharan African (SSA) countries over the period from 1990 to 2019. Windfall gains and losses of income are measured in terms of fluctuations in a country-specific commodity terms of trade (CTOT) index in which each commodity is weighted by the ratio of exports of that commodity in the country’s gross domestic product (GDP). The CTOT index therefore reflects the commodity export specialisation for individual countries. The data on CTOT are taken from the International Monetary Fund. Additionally, we use changes in real GDP per capita as our SSA economic performance measure. We employ a random coefficient model that yields individual estimates for each of the countries included in the analysis. Our approach is based on the assumption that the effect of windfall gains and losses on real GDP per capita growth varies across different SSA countries. Our main conclusion can be elaborated as follows: first, natural resources have undoubtedly contributed to higher economic growth in SSA countries since 1990. Second, when SSA countries are analytically divided into two groups depending on their commodity export specialisation, we find that resource-rich countries—in particular oil rich—are the best economic growth performers during the observation period. Finally, we find that windfall gains from commodity exports are not significantly associated with increased real GDP per capita growth in most agriculture-exporting countries.

We analyze the effect of an exogenous economic shock on youth, specifically their incentive for preferring to participate in the labor market over continuing their education. We examine the Chilean case and the sustained increase in the market price of the minerals extracted there during the period of Metal Mining Price Boom between the years 2003 and 2011. Chile is a large-scale producer of metals, being the world's largest producer of copper and the third largest producer of molybdenum. The prices of such metals increased steadily during the shock, what boosted the economic growth and the demand for labor. This shock altered the skill composition in the labor market, increasing the jobs for low- and medium–low-skilled workers in the counties more exposed to the shock, thus being the metal mining counties the most affected by its impact. According to this, our results show a negative impact of the shock on returns to schooling that simultaneously reduced school enrollment rates while increasing youth labor participation in those counties. © 2021, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.

This paper discusses the role of private sector development in overcoming the challenges of the resource curse. It identifies the developmental factors in the private sector in natural resource dep...

This study examines the natural resource curse hypothesize on a panel of 111 countries over the period 1996–2015. Using a range of heterogeneous panel cointegration techniques, it tests the resourc...

Azerbaijan is a case study of the issue of nations with non-renewable natural resource-based economies, usually fossil fuels, facing depletion of what was deemed to be their principal resource. Azerbaijan’s petroleum wealth has been a defining feature of its national economy, social development, and national character for 150 years. It has also manifested what is commonly known as the “resource curse” for its entropic effect on all of the other sectors of the economy. This main driver of its economy is projected to be exhausted roughly within the next 30 years. The focus of this piece is on assessing the prospects of developing a national economy that can create a more equitable and sustainable economic public benefit over the next generation. Each of the pathways summarized herein are from capstone project research reports of graduate students on this issue. It is ultimately intended to be a demonstration of conducting applied future-oriented anticipatory action learning.

This paper employs the system generalized method of moments to examine the diversity of economic growth in 33 resource‐rich and resource‐poor countries in sub‐Saharan Africa (SSA) over the period 1996–2017. The last decade has witnessed resource‐poor countries such as Rwanda and Ethiopia sustain impressive economic growth while resource‐rich countries such as Nigeria and the Democratic Republic of the Congo continue to struggle. On the other hand, non‐oil resource‐rich countries such as Botswana and Namibia record steady economic growth rates. Are resource‐rich countries better off? Or is there sufficient evidence in support of the resource curse phenomenon in SSA? We examine the resource curse hypothesis and the effects of political and institutional variables in explaining economic growth in SSA. We find that resource‐rich countries grow at an annual average of 1.3% more than resource‐poor countries. Furthermore, we find strong complementarity between institutional quality and economic growth in resource‐rich countries; a stable democracy, political stability, and periodic rotation of political power are critical prerequisites in sustaining economic growth in resource‐rich countries in SSA. Overall, the findings suggest weak evidence in support of the resource curse phenomenon in SSA.

This paper tests the political economy theory of the resource curse of the Iranian economy over the period 1984–2017. We find that natural resources dependence is harmful to economic development on...

The importance of replication has been a major matter of discussion among political scientists for decades. However, in the past five years, the issue has gained greater traction, with many major journals adopting official standards for Data Access and Research Transparency (DA-RT). At the same time, scholars suggest the pivotal role that replication might play in methods training for students. Unfortunately, these conversations have been limited in that they emphasize quantitative methods and training of graduate students. This article seeks to fill this gap by offering commentary on the author’s experience in introducing a qualitative replication project in an upper-division undergraduate course. The students in the course replicated Ross’s (2004) influential article on the “resource curse,” but the assignment framework can be adopted for various topics and contexts.

Recently, work on the natural resource curse thesis has extended to testing the effects of natural resources on public health. Focusing on the case of malaria, this paper examines the effects of the interaction between resource dependence and political institutions on malaria management. To be more specific, this work argues that in a resource-abundant state, democracy plays an active role in providing health goods to the general public and allocating government funds to public health. Democracies also combat corruption behaviors and diversify economies in a more effective way than their autocratic counterparts. By testing a series of interaction effects between natural resources and democracy, this paper finds a positive and robust effect of democracy on the reduction of malaria death rates in resource-rich states, based on data on malaria deaths during the period of 1990–2016. Resource-rich dictatorships demonstrated the worst performance in malaria control compared with resource-rich democracies and resource-poor democracies and dictatorships. This empirical evidence has policy implications for resource management, public health, and infectious disease control and prevention.

Ghana’s 2007 oil discovery prompted widespread concern about the “political resource curse.” Ghanaian policymakers, in partnership with the international community, mobilized resource curse discourse to propel innovative reforms aimed at building institutional capacity, enhancing transparency, and promoting accountability. Ghana’s urgent and decisive response to the problem of oil, however, highlighted its relative lack of resolve to address enduring mineral conflict. In this article, we employ fieldwork, event ethnography, and a content analysis of 1,003 articles published in Ghana’s Daily Graphic (2006-2012) to trace the discursive and material effects of oil on Ghana’s extractive governance landscape. We argue that global discourse around oil grounded in resource curse centered Ghana’s political attention on oil relative to conventional minerals like gold and reinforced modes of extractive governance that overlook longstanding violence around gold extraction. Our research demonstrates the continued power of resource curse discourse to construct a model of natural resource governance and conflict that remains disconnected from lived experience. We question the utility of resource curse as a lens through which to view resource-conflict linkages by demonstrating how it fails to capture important aspects of the relationship between resource extraction, governance, and violent conflict.

Why do some fragile states collapse while others do not? This article presents results from a comparative analysis of the causes of state collapse. Using a dataset of 15 cases of state collapse between 1960 and 2007, we conduct both synchronic and diachronic comparisons with two different control groups of fragile states using crisp-set QCA. The results support our hypothesis that state collapse has multiple causes. The militarization of political groups, when combined with other conditions, plays a major part in the process. Other causal factors are political transition, extreme poverty, declining government resources or external aid, factionalist politics, repression and pre-colonial polities. This challenges structuralist explanations focusing on regime types and the resource curse, among other things, and opens up avenues for further research.

The strategic management of resources have recently garnered widespread analytic attention with the prevailing consensus being the “resource curse,” and its negative effect on social, economic and political development worldwide. The curse is significantly worse for traditional and indigenous communities where tribal land rests atop valuable subterranean resources without much leverage to negotiate for their use or ownership. Some of the poorest indigenous people live in the most resource-rich regions of the world, a condition that is true in both the developed and developing worlds alike. The Royal Bafokeng Nation of South Africa, however, provides a strong counterpoint. Deemed Africa's richest ethnic group, the nation was able to leverage its political clout to establish a community investment company which administers a lucrative financial portfolio that consists of assets in a diverse range of economic sectors all stemming from platinum resources on Bafokeng tribal land. The case of the Royal Bafokeng Nation provides a stark anomaly to the literature on indigenous access to subterranean resources and begs the question “how do communities navigate leverage with their respective state governments in order to benefit from their subterranean natural resources on their indigenous land?” To examine this question, this paper borrows insights from examples in former Anglophone colonies of settlement for structural context and argues that the Bafokeng's political culture evidenced by its political mobilization, inclinations to litigate and its shrewd politicking provided levers of success in negotiating for communal access to platinum resources.

A common puzzle in economics is whether natural resources are a ‘curse’ or a ‘blessing’ for economic development. Previous studies have suggested that resource booms can promote growth, but private...

This study reviews the theoretical literature concerning the resource curse as it pertains to the impact of natural resources upon economic growth and corruption in sub-Saharan Africa (SSA), and how the Extractive Industries Transparency Initiative (EITI) membership can be of help. The EITI is an international standard promoting open and transparent resource governance through disclosure mechanisms in the resource value chain. Corruption has been associated with less-than-average economic growth in resource-rich countries. This research concludes that the theoretical review found that through the dissemination of disclosures in the natural resource sector, the EITI can potentially reduce the prevalence of corruption in implementing countries in SSA and it can address negative economic growth outcomes associated with resource abundance. However, there is not much evidence empirically needed to suggest this.

PurposeThe Oman economy is dominated by production and export of petroleum products and an overdependence on oil revenue, which may have contributed to the continuance of the “resource curse” phenomenon. The purpose of this research is to examine the co-integration of oil with macroeconomic indicators of Oman and of suggesting some policy reform measures to trim down overdependence on oil.Design/methodology/approachThe authors culled out data from the annual reports published by the Central Bank of Oman from 1975 to 2016. Considering oil price and oil export volume as regressors, the long-term integration with other macroeconomic indicators was examined by using the bound test. Further, auto regressive distributed lag (ARDL) model was also derived to check the impact of these cross-sectional relations.FindingsOil price is observed to have a strong long-term significant relation with all the macroeconomic variables used in this study. However, the volumes of oil exports do not appear to have significant influence on GDP and consumption but do naturally sway other variables. This indicates that less elasticity of consumption to the flow of macro income, because the consumption in the Omani economy is driven by perceived future income. Oil export revenue is not seems to be much impacting on the real sector as the deficits are funded by the government through compensatory spending. Oil prices and oil exports have exhibited a strong long-term integration with variables such as gross domestic savings (GDS), credit to government (C2G), credit to private (C2P), demand deposits (DD) and time deposits (TD). This hints that oil boom does constitute the key source of funding of the financial sector of Oman.Research limitations/implicationsThis study offers a generalized submission to support the real sector of Oman to lead out of a resource curse through diversification. The study however does not provide industrial groupings to assess the impact of fluctuations in oil prices.Originality/valueThis research has confirmed the existence of “resource movement” effect and “spending effect” in Oman economy. The nation needs to take radical measures to come out of this phenomenon. For addressing this we have suggested the modified version of Shumpeterian model of creative destruction. In this model we call for demolishing the oil dependent structure with a diversification structure. The new move can bring more positive effect on real and financial sectors of the economy.

How does governments’ ability to gain financing from oil income affect their behaviour? Numerous studies have explored the effects of oil wealth on countries’ political characteristics, especially the level of democracy. Oil has also been associated with a significant electoral incumbency advantage across different political regimes. However, the relationship between oil wealth and incumbent governments’ behaviour, including election‐year fiscal manipulation, has been studied to a lesser extent. This article argues that higher oil rents increase election‐year public spending as they provide national governments both with direct revenue and increased financing opportunities. However, fiscal transparency mitigates this effect. Consequently, oil‐induced electoral budget cycles decrease as fiscal transparency increases. Using a high‐quality measure of fiscal transparency in a panel of countries, robust evidence in favour of this argument is found. The findings suggest that many of the previous results on the political effects of oil, including incumbency advantage, might run through an election‐year spending channel, and that fiscal institutions might matter substantially for the political effects of oil.

This paper presents a model of international trade with heterogeneous firms and endowment differences across countries to explore the adjustment of production and trade patterns to exogenous shocks...

The macroeconomic impacts of resource-based development are diverse across national space. However, the more export dependent and geographically peripheral the region, the more susceptible it is to boom-and-bust cycles. We typify resource-based economic development in Peru in the period 2001–2015, analyzing regional export specialization, growth volatility, and de-industrialization, three resource curse symptoms. With the commodity cycle: (i) export specialization is not the same in all mineral regions; (ii) regional growth volatility is much higher at regional level than at national level; and (iii) there is no convincing case of de-industrialization and the Dutch disease, because a world economy surge does not operate as a national resource discovery. We say economic evolution within resource-rich Peru is volatile and spatially varied. At the national level, gold-and-copper-dependent Peru is not as vulnerable as other mineral dependent countries to external shocks. At the subnational level, growth volatility is very high for clusters of regions. Economic geography studies can contribute to challenging popular resource curse accounts of the development economics literature: we should be asking where, when, and why there is curse or blessing, and what type of it, rather than searching for a definitive universal answer on the developmental effects of mineral abundance.

The local effects of mining might simply come and go with mine production. In this paper we revisit Aragón and Rud's (2013) study of the Yanacocha mine, frequently cited to account for local economic effects and backward linkages, but we offer a more nuanced interpretation: first, effects fade with the mine exhaustion; and second, impacts are the result of consumption boom-and-bust dynamics. While we find it more conceptually accurate to reserve the concept of backward linkages for effects of a productive nature, our evidence reveals that unskilled services is the one sector that benefits, in contrast to manufactures and skilled services. We stress that impact evaluations of mines are contingent to time and place, and contend that exploring the extent to which multipliers generate spillovers is central. The short-run effects of a mine might in fact give little indication of how to tell or make a blessing from a curse.

The literature on the political “resource curse” has recently seen heated debates over the average causal effects of oil on democracy and the generalizability of the theory. One of the reas...

The recent crash in the international crude oil price and the fluctuations in the price of gold force oil-net-exporting and gold-producing African countries into recession, thereby necessitating the government to budget for the deficit to cater for the revenue inadequacy. To this end, this study examines the role of deficit finance in the economy of natural resource-abundant nations in Africa to provide an alternative explanation to the resource curse and Dutch disease syndromes. We use the fully modified ordinary least squares as the technique of estimation, and results show that natural resources positively impact output growth in Angola, Egypt, Nigeria, and Tanzania, while they negatively affect output growth in South Africa. Also, in Egypt, Tanzania, and South Africa, Dutch disease is not a problem as the exchange rate negatively affects output growth, while it is a problem in Angola and Nigeria. Lastly, deficit financing positively enhances output growth only in Angola and South Africa, while it is significant only in both Tanzania and Angola. We, therefore, recommend that South Africa should utilise its positive fiscal stance to augment the adverse effect of its natural resources on output growth, while Egypt, Nigeria, and Tanzania should source more funds from external sources to finance deficits and improve the efficiency of fiscal deficits on output growth.

Ghana’s Petroleum Revenue Management Act 815 (amended to Act 893 in 2015) established the Public Interest and Accountability Committee (PIAC) in 2011 with the mandate to ensure accountabili...

Over the past few decades, the wealth of Africa has not made African wealthy. There is a voicing that Africa is cursed, whether richly poor or poorly rich. Sub-Saharan Africa is commonplace for political turbulence, as well as humanitarian and economic misery. In such a catastrophic situa-tion, political economics studies have focused on the Resource Curses, Dutch Diseases, and Con-flict Resources in this area. A systematic scientometric analysis of this field would be beneficial but is currently lacking in the academic literature. Using VOSviewer and CiteSpace, this review fills the void by analyzing the 1783 articles published in the WoS SSCI Collection between 1993 and 2020 on the “Resource Curses”, “Dutch Diseases”, and “Conflict Resources”. The author dis-cusses recent papers with disruptive potential, references with the most robust citation explora-tions, and cooperation networks between authors and institutes. Three hotspots were detected: the causes and effects of the Resource curses; the interaction among the Resource Curses, Dutch Diseases, and Conflict Resources; the factors that affect rent collection and regime resilience. While the literature on the “Resource curse” and “Dutch Disease” has been around longer, studies on “Conflict Resources” are picking up quickly. Conflict Resources were characterized by active citation exploration keywords and multiple active co-citation clusters, including possibly groundbreaking articles. There is a massive overlap between the three strings of literature, but each one has its emphasis.

This paper investigates how economic norms shape the relation between oil wealth and economic growth based on a dynamic model that accounts for endogeneity problems. To achieve that, we apply a system-GMM dynamic approach in 103 developing countries classified by their level of contract intensity, over the period 1970–2010. We find that controlling for contract intensity, is important in rendering the direction of the detrimental effects of oil wealth on economic growth. When economies are characterised by a low degree of contract intensity, oil wealth is not growth-enhancing. And when economies achieve a certain level or threshold of contract intensity, then they may become immune to the economic resource curse. In this connection we make an important contribution, by identifying a threshold level of contract intensity, above which the resource curse vanishes. Overall, our paper demonstrates that the oil related economic curse is not inevitable. The presence of contract intensive economic norms can alter a curse into a blessing, and we identify the point at which the switch takes place. This has important implications for policy design in managing resource rents in developing countries; promoting contractual norms in the marketplace is growth enhancing.

PurposeLiterature reviews were conducted with the aim of analysing and deriving evidence and reference points. A qualitative research approach was also used in order to properly identify situations, problems and solutions related to the particular context of sustainable development with Africa as a focus.Design/methodology/approachThe Sustainable Development Goals are a commendable metric and framework by which to measure practical improvements in various governments, communities or socio-economic regions. There is also the reality of adapting and implementing this framework to the dynamic nature of myriad environments consisting of many distinct cultures, ideologies and lifestyles. The purpose of this article is to briefly and pointedly assess the African status quo in relation to achieving the United Nations’ (UN) prescribed Sustainable Development Goals (SDGs). The African challenges and shortcomings in this regard are addressed and ideas for solutions are also looked into.FindingsEconomic inadequacies and poor development are not always rooted in a lack of resources or the will to act but usually as a result of bad governance, corruption and poor adoption of suggested strategies for recovery. This brings into focus the facet of the resource curse. It is seen in multiple contexts across continents that having reserves of resources does not translate to economic prosperity if the concerned region is weighed down by poor governance or stagnant policies. The article shows that though the journey to implementing solutions is challenging, consistent commitment to trusted development frameworks and social programs will benefit many communities and spark projects for economic self-sufficiency.Originality/valueThis article is important because it is a quick and concise snapshot about the realities experienced by a contemporary African attempting to evaluate the cumulative value and worth of the UN prescribed SDGs. This work is also valuable to academic institutions and young/aspiring researchers alike, it can serve as a compact reference point that analyses the realities of the concept of the “resource curse” in relation to attainable SDGs.

This paper investigates the local effects of mining on the quality of public services and on people's optimism about their future living conditions in Africa. Most importantly, it assesses the moderating role of local institutions and local governments' taxing rights in shaping the proximity-to-mine effects. The empirical framework connects more than 130,000 respondents from the Afrobarometer survey data (2005-2015) to their closest mines based on the geolocation coordinates of the enumeration areas (EA) and data on the mines and their respective status from the SNL Metals & Mining by the S&P. The geo-referenced data are matched with new indicators on local governments' taxing rights across the African continent. Using a difference-in-differences strategy, the results indicate that citizens living near an active mine are less likely to approve government performance in key public goods and services - including health, job creation and improving living standards of the poor. On the moderating role of local governance and local taxing rights, the findings point to a negative impact of local corruption, yet a positive impact of local authorities' discretion over tax and revenues. However, the positive impact of local taxing powers tends to reduce in environments with poor quality of local governance, high incidence of bribe payment and low level of trust in local government officials. Residents of mining communities with low corruption and comparatively high-level of raising revenue ability have the highest rate of positive appraisal compared to the other scenarios. (C) 2020 The Author(s). Published by Elsevier Ltd.