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Is Mother Nature a Curse for Social Development?

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Author Info
Desire Avom (Universite’ de Yaounde’ II)
Fabrizio Carmignani () (MRG - School of Economics, The University of Queensland)
Abstract

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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  1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
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  2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003. [Downloadable!]
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  3. M. Ayhan Kose & Eswar S. Prasad & Marco E. Terrones, 2006. "How Do Trade and Financial Integration Affect the Relationship between Growth and Volatility?," IZA Discussion Papers 2252, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Carmignani, Fabrizio, 2008. "The impact of fiscal policy on private consumption and social outcomes in Europe and the CIS," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 575-598, March. [Downloadable!] (restricted)
  5. Gupta, Sanjeev & Verhoeven, Marijn & Tiongson, Erwin R., 2002. "The effectiveness of government spending on education and health care in developing and transition economies," European Journal of Political Economy, Elsevier, vol. 18(4), pages 717-737, November. [Downloadable!] (restricted)
  6. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May. [Downloadable!] (restricted)
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  7. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
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  8. Valeria Costantini & Salvatore Monni, 2006. "Environment, Human Development and Economic Growth," Working Papers 2006.35, Fondazione Eni Enrico Mattei. [Downloadable!]
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  9. Christa N. Brunnschweiler, 2006. "Cursing the blessings? Natural resource abundance, institutions, and economic growth," CER-ETH Economics working paper series 06/51, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
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  10. 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. [Downloadable!] (restricted)
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  11. Anne D. Boschini & Jan Pettersson & Jesper Roine, 2007. "Resource Curse or Not: A Question of Appropriability," Scandinavian Journal of Economics, Blackwell Publishing, vol. 109(3), pages 593-617, 09. [Downloadable!] (restricted)
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  12. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2006. "Growth volatility and financial liberalization," Journal of International Money and Finance, Elsevier, vol. 25(3), pages 370-403, April. [Downloadable!] (restricted)
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  13. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May. [Downloadable!] (restricted)
  14. 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. [Downloadable!] (restricted)
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