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Transmission channels of the resource curse in Africa: A time perspective

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  • Henry, Alexandre

Abstract

Most sub-Saharan African countries share the following characteristics: a strong dependence on natural resources, weak institutions, and relatively low growth levels preventing them to catch up with the rest of the developing world. This paper aims to unfold the natural resource curse by introducing a time perspective: long-term versus short-term effects. Following the two-step Engle and Granger procedure, an error-correction model is performed after a cointegration estimation. In addition, the paper clusters the countries to differentiate the natural resource curse mechanisms by level of institutional quality. Results are three-fold. On the long run, the negative impact of the dependence is confirmed for all categories. Countries with weak institutions are more vulnerable to the curse because the resource dependence not only negatively impacts long-term growth but also adversely impacts the recovery process. Finally, in a strong institutional environment, results point towards a potential positive impact of natural resources during recovery process.

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  • Henry, Alexandre, 2019. "Transmission channels of the resource curse in Africa: A time perspective," Economic Modelling, Elsevier, vol. 82(C), pages 13-20.
    • Handle: RePEc:eee:ecmode:v:82:y:2019:i:c:p:13-20
    DOI: 10.1016/j.econmod.2019.05.022
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    More about this item

    Keywords

    Resource curse; Africa; Institutions; Transmission; Channel; ECM;
    All these keywords.

    JEL classification:

    • 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
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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