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Do globalization and resource rents matter for human well-being? Evidence from African countries

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  • Issidor Noumba
  • Armand Gilbert Noula
  • Stéphane Mbiankeu Nguea

Abstract

Many African countries are endowed with huge natural resources but still lag behind as far as human development is concerned. This study examines the link between globalization, natural resource rents and human development in 49 African countries over the 2000–2017 period. We use the two-step Generalized Method of Moments (GMM) estimations to analyse data coming from UNDP, the World Bank, and the KOF globalization index dataset. Our findings show that globalization improves human well-being. When further decomposition is done, we find that economic, social and political globalizations are positively and significantly associated with human development index. We also find evidence of a natural resources-human development curse. Moreover, our results show that the magnitude of the improving effect of globalization on human development depends on the natural resource rents with threshold of 9.15 (%GDP) at which the positive effect of globalization becomes negative. Finally, we perform sub-regional analyses and find that these patterns are shown to be robust across Sub-Saharan African countries. The main lessons learnt from the study are that African countries should care about how to seize opportunities offered by globalization and avoid rent-seeking behaviours when endowed with natural resource rents.

Suggested Citation

  • Issidor Noumba & Armand Gilbert Noula & Stéphane Mbiankeu Nguea, 2022. "Do globalization and resource rents matter for human well-being? Evidence from African countries," International Economics, CEPII research center, issue 170, pages 49-65.
    • Handle: RePEc:cii:cepiie:2022-q2-170-3
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    Citations

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    Cited by:

    1. Ponce, Pablo & Yunga, Fernando & Larrea-Silva, Jhohana & Aguirre, Nikolay, 2023. "Spatial determinants of income inequality at the global level: The role of natural resources," Resources Policy, Elsevier, vol. 84(C).
    2. Noumba, Issidor & Nguea, Stéphane Mbiankeu, 2023. "Assessing the role of globalization for universal electricity access," International Economics, Elsevier, vol. 174(C), pages 180-195.
    3. Soran Mohtadi, 2023. "An empirical analysis on the relationship between resource rents and education: the role of institutional quality thresholds," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(2), pages 217-236, June.
    4. Mahmood Ahmad & Zahoor Ahmed & Xiyue Yang & Muhlis Can, 2023. "Natural Resources Depletion, Financial Risk, and Human Well-Being: What is the Role of Green Innovation and Economic Globalization?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 167(1), pages 269-288, June.
    5. Terver Theophilus Kumeka & Isiaka Akande Raifu & Oluwatosin Adeniyi, 2024. "Globalisation and Inclusive Growth in Africa: The Role of Institutional Quality," Foreign Trade Review, , vol. 59(1), pages 62-97, February.

    More about this item

    Keywords

    Globalization; Resource rents; Human well-being; Africa;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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