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Natural Resources, Governance, and Economic Growth in Africa

Author

Listed:
  • Park, Bokyeong

    (Korea Institute for International Economic Policy)

  • Lee, Kang-Kook

    (Ritsumeikan University)

Abstract

Development economists have found evidence that an abundance in natural resources hinders economic growth, contrary to conventional expectations. This finding is called the resource curse hypothesis. The mDevelopment economists have found evidence that an abundance in natural resources hinders economic growth, contrary to conventional expectations. This finding is called the resource curse hypothesis. The major questions this paper addresses are: does the resource curse hypothesis apply to Africa? If so, what are its major channels? Our hypothesis is that governance is much more important in Africa than in other regions because of non-democratic and unstable political environments, which are closely associated with natural resources in African countries and hinder economic growth. We find empirical evidence for this argument using GMM with endogenous governance. Our findings shed light on the deleterious role of natural resources in governance and economic growth in Africa.

Suggested Citation

  • Park, Bokyeong & Lee, Kang-Kook, 2006. "Natural Resources, Governance, and Economic Growth in Africa," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 10(2), pages 167-200, December.
    • Handle: RePEc:ris:eaerev:0165
    DOI: 10.11644/KIEP.JEAI.2006.10.2.161
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    More about this item

    Keywords

    Natural Resource; Governance; African Economy; Economic Growth;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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