The natural resource curse and the spread of HIV/AIDS, 1990–2008

Experts suggest that effective public action can prevent the spread of HIV/AIDS. Countries dependent on natural resource wealth, such as oil, are likely to suffer from governance failures and thereby suffer lower quality public health. Since the cost of fighting disease redistributes income away from rulers, resource wealth is likely to lead to neglect of public action aimed at stemming a deadly disease. We test this proposition in 137 countries from 1990 until 2008 using oil wealth as a proxy for endogenous policy choices on the prevalence of HIV/AIDS, a proxy outcome for ineffective policy and neglect of public action. We find that the ‘resource curse’ seems to affect the spread of HIV/AIDS, even though oil-rich countries ceteris paribus should have more financial resources for effective public action. The results are robust to a host of controls, alternative indicators, and fixed effects estimation.