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Natural resource wealth and public social spending in the Middle East and North Africa

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  • Cockx, Lara
  • Francken, Nathalie

Abstract

This paper investigates the discrepancy between the vast natural resource wealth and the relatively low spending on human development in the Middle East and North Africa (MENA) region. Our results show a robust, significant inverse relationship between natural resource dependence and public health spending, and natural resource dependence and public education spending over time. The effects remain significant after controlling for income, aid, the age structure of the population, and the quality of institutions. Moreover, we find a particularly strong resource curse effect of oil on social spending. Despite the mounting burden on MENA‘s economic development models due to significant population growth and the pressing need for diversification, countries have been unable or unwilling to convert natural resource wealth into increased social spending. Governments should be strongly encouraged to manage their natural wealth in an accountable and equitable manner that follows international best practice. Correct taxation of natural resource, and especially, oil wealth should provide the governments with adequate budgets to fund a desirable level of public health provision. Finally, the equity of distribution of education spending could be improved.

Suggested Citation

  • Cockx, Lara & Francken, Nathalie, 2015. "Natural resource wealth and public social spending in the Middle East and North Africa," IOB Working Papers 2015.03, Universiteit Antwerpen, Institute of Development Policy (IOB).
  • Handle: RePEc:iob:wpaper:201503
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    Cited by:

    1. Al-Shboul, Mohammad & Al Rawashdeh, Rami, 2022. "The impact of institutional quality and resources rent on health: The case of GCC," Resources Policy, Elsevier, vol. 78(C).
    2. Ajide, Kazeem Bello & Ibrahim, Ridwan Lanre & Mohammed, Abubakar & Saleh Al-Faryan, Mamdouh Abdulaziz, 2023. "Infectious diseases and health outcomes’ implications of natural resource curse in Africa," Resources Policy, Elsevier, vol. 81(C).
    3. Seyfettin Erdo an & Emrah smail evik & Ayfer Gedikli, 2020. "Healthcare Expenditures Channel of Natural Resource Curse: The Case of Gulf Cooperation Council Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 285-293.
    4. Oduyemi, Gabriel Olusegun & Owoeye, Taiwo & Adekoya, Oluwasegun Babatunde, 2021. "Health outcomes and the resource curse paradox: The experience of African oil-rich countries," Resources Policy, Elsevier, vol. 73(C).

    More about this item

    Keywords

    public social spending; Middle East; North Africa;
    All these keywords.

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