Child mortality, commodity price volatility and the resource curse

Given many developing economies depend on primary commodities, the fluctuations of commodity prices may imply significant effects for the wellbeing of children. To investigate, this paper examines the relationship between child mortality and commodity price movements as reflected by country-specific commodity terms-of-trade. Employing a panel of 69 low and lower-middle income countries over the period 1970–2010, we show that commodity terms-of-trade volatility increases child mortality in highly commodity-dependent importers suggesting a type of ‘scarce’ resource curse. Strikingly however, good institutions appear able to mitigate the negative impact of volatility. The paper concludes by highlighting this tripartite relationship between child mortality, volatility and good institutions and posits that an effective approach to improving child wellbeing in low to lower-middle income countries will combine hedging, import diversification and improvement of institutional quality.