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Is Mother Nature a Curse for Social Development?

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On the question of whether natural resources kill growth, the jury is still out. While waiting for a decision, we provide evidence that Mother Nature is responsible for slowing down social development over and above any effect it might have on income or growth. We define social development by a combination of health and education outcomes. We find that, after controlling for per-capita income and a bunch of other macroeconomic and institutional factors, a higher dependence on (point and diffuse) natural resources causes social underdevelopment. The estimation of a system of equations indicates two possible transmission mechanisms. One operates via income inequality, the other via macroeconomic volatility.

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Paper provided by School of Economics, University of Queensland, Australia in its series MRG Discussion Paper Series with number 2709.

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Handle: RePEc:qld:uqmrg6:27

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  16. Ricardo Gottschalk, 2005. "The Macro Content of PRSPs: Assessing the Need for a More Flexible Macroeconomic Policy Framework," Development Policy Review, Overseas Development Institute, vol. 23(4), pages 419-442, 07.
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