IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v35y2023i6p1053-1079.html
   My bibliography  Save this article

Are natural resources also bad for infrastructure quality?

Author

Listed:
  • Sosson Tadadjeu
  • Paul Ningaye
  • Henri Njangang

Abstract

This study contributes to the extensive non‐consensus literature on the resource curse by examining the effect of natural resource dependence on infrastructure quality. We show that natural resources on average have a negative effect on the overall quality of infrastructure, including the quality of various infrastructures such as roads, ports, railroads, airports and the quality of electricity supply. However, we find that, beyond a certain threshold, natural resources improve the quality of some infrastructure. This study also supports the importance of improving the quality of institutions, as we show that natural resources are a blessing for the infrastructure quality in countries with a better institutional framework.

Suggested Citation

  • Sosson Tadadjeu & Paul Ningaye & Henri Njangang, 2023. "Are natural resources also bad for infrastructure quality?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1053-1079, August.
    • Handle: RePEc:wly:jintdv:v:35:y:2023:i:6:p:1053-1079
    DOI: 10.1002/jid.3718
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3718
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3718?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. César Calderón & Alberto Chong, 2004. "Volume and Quality of Infrastructure and the Distribution of Income: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 87-106, March.
    2. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    4. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    5. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa," World Development, Elsevier, vol. 86(C), pages 133-147.
    6. Dorinet, Elizavetta & Jouvet, Pierre-André & Wolfersberger, Julien, 2021. "Is the agricultural sector cursed too? Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 140(C).
    7. Taghizadeh-Hesary, Farhad & Sarker, Tapan & Yoshino, Naoyuki & Mortha, Aline & Vo, Xuan Vinh, 2021. "Quality infrastructure and natural disaster resiliency: A panel analysis of Asia and the Pacific," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 394-406.
    8. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    9. Ahlborg, Helene & Boräng, Frida & Jagers, Sverker C. & Söderholm, Patrik, 2015. "Provision of electricity to African households: The importance of democracy and institutional quality," Energy Policy, Elsevier, vol. 87(C), pages 125-135.
    10. Antonakakis, Nikolaos & Cunado, Juncal & Filis, George & Gracia, Fernando Perez de, 2017. "Oil dependence, quality of political institutions and economic growth: A panel VAR approach," Resources Policy, Elsevier, vol. 53(C), pages 147-163.
    11. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    12. Emily Oster, 2019. "Unobservable Selection and Coefficient Stability: Theory and Evidence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 187-204, April.
    13. Julian Donaubauer & Alexander Glas & Birgit Meyer & Peter Nunnenkamp, 2018. "Disentangling the impact of infrastructure on trade using a new index of infrastructure," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(4), pages 745-784, November.
    14. Jo Thori Lind & Halvor Mehlum, 2010. "With or Without U? The Appropriate Test for a U‐Shaped Relationship," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(1), pages 109-118, February.
    15. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    16. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "The Impact of Terrorism on Governance in African Countries," World Development, Elsevier, vol. 99(C), pages 253-270.
    17. Sambit Bhattacharyya & Paul Collier, 2014. "Public capital in resource rich economies: is there a curse?," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 1-24, January.
    18. Auty, Richard M., 1994. "Industrial policy reform in six large newly industrializing countries: The resource curse thesis," World Development, Elsevier, vol. 22(1), pages 11-26, January.
    19. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2006. "Political foundations of the resource curse," Journal of Development Economics, Elsevier, vol. 79(2), pages 447-468, April.
    20. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    21. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, January.
    22. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    23. Mohammad Reza Farzanegan & Marcel Thum, 2020. "Does oil rents dependency reduce the quality of education?," Empirical Economics, Springer, vol. 58(4), pages 1863-1911, April.
    24. Ebeke, Christian & Omgba, Luc Désiré & Laajaj, Rachid, 2015. "Oil, governance and the (mis)allocation of talent in developing countries," Journal of Development Economics, Elsevier, vol. 114(C), pages 126-141.
    25. Francesco Caselli & Guy Michaels, 2013. "Do Oil Windfalls Improve Living Standards? Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 208-238, January.
    26. Moyo, Busani, 2013. "Power infrastructure quality and manufacturing productivity in Africa: A firm level analysis," Energy Policy, Elsevier, vol. 61(C), pages 1063-1070.
    27. Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
    28. Lashitew, Addisu A. & Werker, Eric, 2020. "Do natural resources help or hinder development? Resource abundance, dependence, and the role of institutions," Resource and Energy Economics, Elsevier, vol. 61(C).
    29. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    30. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
    31. Vicente, Pedro C., 2010. "Does oil corrupt? Evidence from a natural experiment in West Africa," Journal of Development Economics, Elsevier, vol. 92(1), pages 28-38, May.
    32. Vu, Trung V., 2020. "Economic complexity and health outcomes: A global perspective," Social Science & Medicine, Elsevier, vol. 265(C).
    33. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    34. Robert Gillanders, 2014. "Corruption and Infrastructure at the Country and Regional Level," Journal of Development Studies, Taylor & Francis Journals, vol. 50(6), pages 803-819, June.
    35. Hochman, Gal & Tabakis, Chrysostomos & Zilberman, David, 2013. "The impact of international trade on institutions and infrastructure," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 126-140.
    36. Best, Rohan & Burke, Paul J., 2018. "Electricity availability: A precondition for faster economic growth?," Energy Economics, Elsevier, vol. 74(C), pages 321-329.
    37. Albert Wijeweera & Matthew J. Webb, 2011. "Military Spending and Economic Growth in South Asia: A Panel Data Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(5), pages 545-554, June.
    38. Awoa Awoa, Paul & Atangana Ondoa, Henri & Ngoa Tabi, Henri, 2022. "Women's political empowerment and natural resource curse in developing countries," Resources Policy, Elsevier, vol. 75(C).
    39. repec:hal:pseose:halshs-01112661 is not listed on IDEAS
    40. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    41. Matthias Busse & Steffen Gröning, 2013. "The resource curse revisited: governance and natural resources," Public Choice, Springer, vol. 154(1), pages 1-20, January.
    42. Macartan Humphreys, 2005. "Natural Resources, Conflict, and Conflict Resolution," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 508-537, August.
    43. Mare Sarr & Katharina Wick, 2010. "Resources, conflict and development choices: public good provision in resource rich economies," Economics of Governance, Springer, vol. 11(2), pages 183-205, April.
    44. Sosson Tadadjeu & Henri Njangang & Paul Ningaye & Mohammadou Nourou, 2022. "Oil dependence and access to water and sanitation in African countries: Does the Extractive Industries Transparency Initiative matter?," African Development Review, African Development Bank, vol. 34(1), pages 54-67, March.
    45. Frederick Van Der Ploeg & Steven Poelhekke, 2017. "The Impact of Natural Resources: Survey of Recent Quantitative Evidence," Journal of Development Studies, Taylor & Francis Journals, vol. 53(2), pages 205-216, February.
    46. Canning, David, 1998. "A database of world infrastructure stocks, 1950-95," Policy Research Working Paper Series 1929, The World Bank.
    47. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    48. Shuanglin Lin & Wei Zhang, 2009. "The effect of corruption on capital accumulation," Journal of Economics, Springer, vol. 97(1), pages 67-93, May.
    49. Apergis, Nicholas & Payne, James E., 2014. "The oil curse, institutional quality, and growth in MENA countries: Evidence from time-varying cointegration," Energy Economics, Elsevier, vol. 46(C), pages 1-9.
    50. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    51. Amir Mousavi & Jeremy Clark, 2021. "The effects of natural resources on human capital accumulation: A literature survey," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1073-1117, September.
    52. Chengete Chakamera & Paul Alagidede, 2018. "The nexus between infrastructure (quantity and quality) and economic growth in Sub Saharan Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 641-672, September.
    53. Julian Donaubauer & Birgit E. Meyer & Peter Nunnenkamp, 2016. "A New Global Index of Infrastructure: Construction, Rankings and Applications," The World Economy, Wiley Blackwell, vol. 39(2), pages 236-259, February.
    54. Robert Deacon, 2009. "Public good provision under dictatorship and democracy," Public Choice, Springer, vol. 139(1), pages 241-262, April.
    55. Kyriacou, Andreas P. & Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2019. "The efficiency of transport infrastructure investment and the role of government quality: An empirical analysis," Transport Policy, Elsevier, vol. 74(C), pages 93-102.
    56. Isaiah Andrews & James H. Stock & Liyang Sun, 2019. "Weak Instruments in Instrumental Variables Regression: Theory and Practice," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 727-753, August.
    57. Dustin Chambers & Jonathan Munemo, 2019. "Natural Resource Dependency and Entrepreneurship: Are Nations with High Resource Rents Cursed?," Journal of International Development, John Wiley & Sons, Ltd., vol. 31(2), pages 137-164, March.
    58. Tadadjeu, Sosson & Njangang, Henri & Ningaye, Paul & Nourou, Mohammadou, 2020. "Linking natural resource dependence and access to water and sanitation in African countries," Resources Policy, Elsevier, vol. 69(C).
    59. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "An Evaluation of Instrumental Variable Strategies for Estimating the Effects of Catholic Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 791-821.
    60. repec:oup:econjl:v:129:y:2019:i:10:p:2745-2778. is not listed on IDEAS
    61. Esfahani, Hadi Salehi & Ramirez, Maria Teresa, 2003. "Institutions, infrastructure, and economic growth," Journal of Development Economics, Elsevier, vol. 70(2), pages 443-477, April.
    62. Ben Katoka & Jörg Michael Dostal, 2022. "Natural Resources, International Commodity Prices and Economic Performance in Sub-Saharan Africa (1990–2019)," Journal of African Economies, Centre for the Study of African Economies, vol. 31(1), pages 53-74.
    63. Jonathan Munemo, 2022. "Do African resource rents promote rent-seeking at the expense of entrepreneurship?," Small Business Economics, Springer, vol. 58(3), pages 1647-1660, March.
    64. Canning, David, 1998. "A Database of World Stocks of Infrastructure, 1950-95," The World Bank Economic Review, World Bank, vol. 12(3), pages 529-547, September.
    65. Ajide, Kazeem Bello, 2022. "Is natural resource curse thesis an empirical regularity for economic complexity in Africa?," Resources Policy, Elsevier, vol. 76(C).
    66. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    67. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
    68. Lim, King Yoong & Morris, Diego, 2022. "Thresholds in natural resource rents and state owned enterprise profitability: Cross country evidence," Energy Economics, Elsevier, vol. 106(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xie, Chengyuan & Huang, Lu, 2024. "How to drive sustainable economic development: The role of fintech, natural resources, and social vulnerability," Resources Policy, Elsevier, vol. 94(C).
    2. Simplice A. Asongu & Samba Diop & Ekene ThankGod Emeka & Amarachi O. Ogbonna, 2024. "The role of governance and infrastructure in moderating the effect of resource rents on economic growth," Working Papers of the African Governance and Development Institute. 24/027, African Governance and Development Institute..

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ongo Nkoa, Bruno Emmanuel & Tadadjeu, Sosson & Njangang, Henri, 2023. "Rich in the dark: Natural resources and energy poverty in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 80(C).
    2. Kamguia, Brice & Keneck-Massil, Joseph & Nvuh-Njoya, Youssouf & Tadadjeu, Sosson, 2022. "Natural resources and innovation: Is the R&D sector cursed too?," Resources Policy, Elsevier, vol. 77(C).
    3. Njangang, Henri & Asongu, Simplice A. & Tadadjeu, Sosson & Nounamo, Yann & Kamguia, Brice, 2022. "Governance in mitigating the effect of oil wealth on wealth inequality: A cross-country analysis of policy thresholds," Resources Policy, Elsevier, vol. 76(C).
    4. Tadadjeu, Sosson & Njangang, Henri & Asongu, Simplice A. & Kamguia, Brice, 2023. "Natural resources, child mortality and governance quality in African countries," Resources Policy, Elsevier, vol. 83(C).
    5. Avom, Désiré & Keneck-Massil, Joseph & Njangang, Henri & Nvuh-Njoya, Youssouf, 2022. "Why are some resource-rich countries more sophisticated than others? The role of the regime type and political ideology," Resources Policy, Elsevier, vol. 79(C).
    6. Tadadjeu, Sosson & Njangang, Henri & Ningaye, Paul & Nourou, Mohammadou, 2020. "Linking natural resource dependence and access to water and sanitation in African countries," Resources Policy, Elsevier, vol. 69(C).
    7. Tadadjeu, Sosson & Njangang, Henri & Woldemichael, Andinet, 2023. "Are resource-rich countries less responsive to global warming? Oil wealth and climate change policy," Energy Policy, Elsevier, vol. 182(C).
    8. Waqar Wadho & Sadia Hussain, 2023. "Ethnic diversity, concentration of political power and the curse of natural resources," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 113-137, April.
    9. Chi-Swian Wong, 2021. "Science Mapping: A Scientometric Review on Resource Curses, Dutch Diseases, and Conflict Resources during 1993–2020," Energies, MDPI, vol. 14(15), pages 1-48, July.
    10. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    11. Armand Totouom, 2023. "Oil dependency, political institutions, and urban–rural disparities in access to electricity in Africa," Natural Resources Forum, Blackwell Publishing, vol. 47(1), pages 114-133, February.
    12. Ruba A. Aljarallah & Andrew Angus, 2020. "Dilemma of Natural Resource Abundance: A Case Study of Kuwait," SAGE Open, , vol. 10(1), pages 21582440198, January.
    13. Awoa Awoa, Paul & Atangana Ondoa, Henri & Ngoa Tabi, Henri, 2022. "Women's political empowerment and natural resource curse in developing countries," Resources Policy, Elsevier, vol. 75(C).
    14. Hilmawan, Rian & Clark, Jeremy, 2021. "Resource dependence and the causes of local economic growth: An empirical investigation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(03), January.
    15. Vusal Musayev, 2016. "Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 378-391, June.
    16. Awoa, Paul Awoa & Efogo, Françoise Okah & Ondoa, Henri Atangana, 2023. "Oil dependence and entrepreneurship: Non-linear evidence," Economic Systems, Elsevier, vol. 47(1).
    17. Musayev, Vusal, 2014. "Commodity Price Shocks, Conflict and Growth: The Role of Institutional Quality and Political Violence," MPRA Paper 59786, University Library of Munich, Germany.
    18. Slesman, Ly, 2022. "The elusive curse of natural resources on happiness," Resources Policy, Elsevier, vol. 79(C).
    19. Mignamissi, Dieudonné & Malah Kuete, Yselle Flora, 2021. "Resource rents and happiness on a global perspective: The resource curse revisited," Resources Policy, Elsevier, vol. 71(C).
    20. Dell’Anno, Roberto, 2020. "Reconciling empirics on the political economy of the resource curse hypothesis. Evidence from long-run relationships between resource dependence, democracy and economic growth in Iran," Resources Policy, Elsevier, vol. 68(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:35:y:2023:i:6:p:1053-1079. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.