Skip to main content
SpringerLink
Log in

The Geographical Dimension of the Development Effects of Natural Resources

  • Published:
Environmental and Resource Economics Aims and scope Submit manuscript

Abstract

We study the contribution of natural resource intensity to long-term development along different dimensions: per-capita income, institutional quality, and education. We allow natural resources to affect these dimensions differently in different regions of the world. The evidence suggests that natural resources are generally a positive driver of development, but in Sub-Saharan Africa (SSA) their contribution is almost negligible, if not even negative. We explain these cross-regional differences with the fact that in SSA more than anywhere else large resource endowments are combined with a particularly bad disease environment. Some historical evidence and formal econometric results support this hypothesis.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Acemoglu D, Johnson S, Robinson J (2001) The colonial origins of comparative development: an empirical investigation. Am Econ Rev 91(5): 1369–1401

    Article  Google Scholar 

  • Alexeev M, Conrad R (2009) The elusive curse of oil. Rev Econ Stat 91(3): 568–598

    Article  Google Scholar 

  • Alesina A, Baquir R, Easterly W (1999) Public goods and ethnic divisions. Q J Econ 114(4): 1243–12894

    Article  Google Scholar 

  • Alesina A, Baquir R, Easterly W (2000) Redistributive public employment. J Urban Econ 48(2): 219–241

    Article  Google Scholar 

  • Alesina A, Devleeschauwer A, Easterly W, Kurlat S, Wacziarg R (2003) Fractionalization. J Econ Growth 8: 155–194

    Article  Google Scholar 

  • Arellano M, Bover O (1995) Another look at the instrumental variable estimation of error-components models. J Econom 68(1): 29–51

    Article  Google Scholar 

  • Arezki R, van der Ploeg F (2011) Do natural resources depress income per capita. Rev Dev Econ 15(3): 504–521

    Article  Google Scholar 

  • Auty R (1993) Sustaining development in mineral economies: the resource curse thesis. Routledge, London

  • Barro J, Lee W (2010) A new data set of educational attainment in the world, 1950–2010. NBER working paper no 15902

  • Bhattacharyya S (2009) Root causes of African underdevelopment. J Afr Econ 18(5): 745–780

    Article  Google Scholar 

  • Beny L, Cook L (2010) Metals or management? Explaining Africa’s recent economic growth performance. Am Econ Rev 99(2): 268–274

    Article  Google Scholar 

  • Bertocchi G, Canova F (2002) Did colonization matter for growth? An empirical exploration into the historical causes of Africa’s underdevelopment. Eur Econ Rev 46: 1851–1871

    Article  Google Scholar 

  • Blakemore K, Cooksey B (1980) A sociology of education for Africa. George Allen and Unwin, London

    Google Scholar 

  • Bleaney M, Dimico A (2010) Geographical influences on long-run development. J Afr Econ. doi:10.1093/jae/ejq014 (forthcoming, on-line)

  • Blundell R, Bond S (1998) Initial conditions and moment restrictions in dynamic panel data model. J Econom 87(1): 115–143

    Article  Google Scholar 

  • Boschini A, Petterson J, Roine J (2007) Resource curse or not: a question of appropriability. Scand J Econ 109: 593–671

    Article  Google Scholar 

  • Brown D (2000) Democracy, colonization, and human capital in Sub-Saharan Africa. Stud Comput Int Dev 35(1): 20–40

    Article  Google Scholar 

  • Brunnschweiler C (2008) Cursing the blessings? Natural resource abundance, institutions, and economic growth. World Dev 36(3): 399–419

    Article  Google Scholar 

  • Brunnschweiler C, Bulte E (2008) The resource curse revisited and revised: a tale of paradoxes and red herrings. J Environ Econ Manage 55: 248–264

    Article  Google Scholar 

  • Bush K, Saltarelli D (2000) The two faces of education in ethnic conflict. UNICEF Innocenti Research Centre, Florence

    Google Scholar 

  • Butlin N (1993) Economics and the dreamtime, a hypothetical history. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Cain P, Hopkins A (1993) British imperialism: innovation and expansion 1688–1914. Longman, New York

    Google Scholar 

  • Carmignani F, Avom D (2010) The social development effects of primary commodity export dependence. Ecolog Econ. doi:10.1016/j.ecolecon 2010.09.003 (Forthcoming, on-line)

  • Collier P, Gunning J (1999) Explaining African economic performance. J Econ Lit 37(1): 64–111

    Article  Google Scholar 

  • Collier P, Gunning J (1999) Why has Africa grown so slowly. J Econ Perspect 13(3): 3–22

    Article  Google Scholar 

  • Collier P, Hoeffler A (2005) Resource rents, governance and conflict. J Conf Resol 49(4): 625–633

    Article  Google Scholar 

  • Collier P, Hoeffler A, Rohner D (2009) Beyond greed and greviances: feasibility and civil war. Oxford Econ Pap 61(1): 1–27

    Article  Google Scholar 

  • Crowder M (1968) West Africa under colonial rule. Northwestern University Press, Chicago

    Google Scholar 

  • Crosby A (1986) Ecological imperialism: the biological expansion of Europe 900-1900. Cambridge University Press, New york

    Google Scholar 

  • Curtin P (1961) The white man’s grave: image and reality, 1780–1850. J Br Stud 1(1): 94–110

    Article  Google Scholar 

  • Davis G (1995) Learning to love the Dutch disease: evidence from the mineral economies. World Dev 23(10): 1765–1779

    Article  Google Scholar 

  • Davis L, Huttenback R (1987) Mammon and the pursuit of empire: the political economy of British imperialism, 1860–1912. Cambridge University Press, Cambridge

    Google Scholar 

  • Deaton A, Miller R (1996) International commodity prices, macroeconomic performance and politics in Sub-Saharan Africa. J Afr Econ 5(3): 99–191

    Google Scholar 

  • Denoon D (1993) Settler capitalism: the dynamics of dependent development in the southern emisphere. Claredon Press, Oxford

    Google Scholar 

  • Diamond J (1997) Guns, germs and steel: the fate of human socities. Norton, New York

    Google Scholar 

  • Easterly W, Levine R (1997) Africa’s growth tragedy: policies and ethnic divisions. Q J Econ 112: 1203–1250

    Article  Google Scholar 

  • Engerman S, Sokoloff K (2000) Institutions, factor endowments, and paths of development in the new world. J Econ Perspect 14(3): 217–232

    Article  Google Scholar 

  • Gann L, Duignan P (1979) White settlers in tropical Africa. Penguin, Baltimore

    Google Scholar 

  • Gelb A (1988) Oil windfalls: blessing or curse?. Oxford University Press, New York

    Google Scholar 

  • Glaeser E, La Porta R, Lopez-de-Silanes F, Shleifer A (2004) Do institutions cause growth. J Econ Growth 9: 271–303

    Article  Google Scholar 

  • Grier R (1999) Colonial legacies and economic growth. Public Choice 98(2): 317–335

    Article  Google Scholar 

  • Gylfason T (2001) Natural resources, education and economic development. Eur Econ Rev 45(5): 847–859

    Article  Google Scholar 

  • Hall R, Jones C (1999) Why do some countries produce so much more output per worker than others. Q J Econ 114(1): 83–116

    Article  Google Scholar 

  • Harvey D, Kellard N, Madsen B, Wohar M (2010) The Prebisch-Singer hypothesis: four centuries of evidence. Rev Econ Stat 92(2): 367–377

    Article  Google Scholar 

  • Hodler R (2006) The curse of natural resources in fractionalized countries. Eur Econ Rev 50: 1367–1386

    Article  Google Scholar 

  • Hughes R (1987) The fatal shore. Collins Harvill, London

    Google Scholar 

  • Isham J, Woolock M, Pritchett L, Busby G (2005) The variety of resource experience: natural resource export structure and the political economy of economic growth. World Bank Econ Rev 15(2): 222–279

    Google Scholar 

  • Jewsiewicky B (1983) Rural society and the Belgian colonial economy. In: Birmingham D, Martin P (eds) The history of Central Africa. Longman, New York

    Google Scholar 

  • Lang J (1975) Conquest and commerce: Spain and England in the Americas. Academic Press, New York

    Google Scholar 

  • La Porta R, Lopez-de-Silanes F, Shleifer A, Vishny R (1999) The quality of government. J Law Econ Organ 15(1): 222–279

    Article  Google Scholar 

  • Leite C, Weidmann J (1999) Does mother nature corrupt? Natural resources, corruption, and economic growth. IMF working paper 99/85

  • Llyod C, Kaufman C, Hewett P (2000) The spread of primary schooling in Sub-Saharan Africa: implication for fertility change. Popul Dev Rev 26(3): 483–515

    Article  Google Scholar 

  • Lockhart J, Schwartz S (1983) Early Latin America. Cambridge University Press, New York

    Google Scholar 

  • Mehlum H, Moene K, Torvik R (2006) Institutions and the resource curse. Econ J 116(1): 1–20

    Article  Google Scholar 

  • Nitri D (1993) Africa’s educational dilemma: Roadblocks to universal literacy for social integration and change. Int Rev Educ 39(5): 357–372

    Article  Google Scholar 

  • Nunn N (2008) The long-term effects of Africa’s slave trades. Q J Econ 123(1): 139–176

    Article  Google Scholar 

  • Papyrakis E, Gerlagh R (2004) The resource curse hypothesis and its transmission channels. J Compar Econ 32(1): 181–193

    Article  Google Scholar 

  • Robinson R, Gallagher J (1961) Africa and the Victorians: the official mind of imperialism. MacMillan, London

    Google Scholar 

  • Ross M (2001) Does oil hinder democracy. World Polit 53(3): 325–361

    Article  Google Scholar 

  • Rodrik D, Subramanian A, Trebbi F (2004) Institutions rule: the primacy of institutions over geography and integration in economic development. J Econ Growth 9: 131–165

    Article  Google Scholar 

  • Sachs J (2003) Institutions don’t rule: direct effects of geography on per capita income. NBER working paper 9490, http://www.nber.org/papers/w9490

  • Sachs J, Warner A (1997) Sources of slow growth in Africa. J Afr Econ 6(3): 335–376

    Article  Google Scholar 

  • Sachs J, Warner A (2001) The curse of natural resources. Eur Econ Rev 45: 827–838

    Article  Google Scholar 

  • Sala-i-Martin X, Subramanian A (2003) Addressing the natural resource curse: an illustration from Nigeria. IMF working paper 03/139

  • Snyder R (2006) Does lootable wealth breed disorder. Comp Pol Stud 39: 943–968

    Article  Google Scholar 

  • Stijns J (2005) Natural resource abundance and economic growth revisited. Resour Pol 30: 107–130

    Article  Google Scholar 

  • Stock J, Yogo M (2005) Testing for weak instruments in linear IV regression. In: Andrews DWK, Stock JH (eds) Identification and inference for econometric models: essays in honor of Thomas Rothenberg. Cambridge University Press, Cambridge

    Google Scholar 

  • Temple J (1998) Initial conditions, social capital and growth in Africa. J Afr Econ 7(3): 309–347

    Article  Google Scholar 

  • Whitehead C (2007) The concept of British education policy in the colonies 1850–1960. J Educ Admin Hist 39(2): 161–173

    Article  Google Scholar 

  • Wittfogel K (1957) Oriental despotism: a comparative study of total power. Yale University Press, New Heaven

    Google Scholar 

  • Wooldridge J (2010) Econometric analysis of cross-section and panel data. The MIT Press, Boston

    Google Scholar 

  • World Bank (1997) Expanding the measure of wealth: indicators of environmentally sustainable development. Environ Sustain Dev Stud Monogr Ser N 17: 34–38

    Google Scholar 

  • Young C (1994) The African colonial state in comparative perspective. Yale University Press, New Heaven

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Economics, The University of Queensland, Brisbane, Australia

    Fabrizio Carmignani

  2. Department of Economics, Marquette University, Milwaukee, WI, USA

    Abdur Chowdhury

Authors
  1. Fabrizio Carmignani
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Abdur Chowdhury
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Fabrizio Carmignani.

Electronic Supplementary Material

The Below is the Electronic Supplementary Material.

ESM 1 (DOCX 39 kb)

Rights and permissions

Reprints and permissions

About this article

Cite this article

Carmignani, F., Chowdhury, A. The Geographical Dimension of the Development Effects of Natural Resources. Environ Resource Econ 52, 479–498 (2012). https://doi.org/10.1007/s10640-011-9539-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10640-011-9539-x

Keywords

Search

Navigation