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Corruption, Natural Capital and Economic Development: A Dynamic GMM Analysis

Author

Listed:
  • Joshua Ang

    (Rogers State University)

  • Jason Patalinghug

    (Southern Connecticut State University)

Abstract

"Using a dynamic panel dataset of 150 countries for the period of 2006-2018 and a two-step system GMM estimation model, this paper shows that natural resources have a positive effect on economic development while holding corruption constant. Our findings support the notion that natural resources have a positive effect on the economy of a nation. When a country has less corruption, it improves the appropriation of economic gains from natural resources which serves as natural capital that would drive further capital accumulation and further development. We also find that physical capital, human capital, and freedom from corruption show strong positive effects on economic development, controlling for other economic and institutional variables."

Suggested Citation

  • Joshua Ang & Jason Patalinghug, 2025. "Corruption, Natural Capital and Economic Development: A Dynamic GMM Analysis," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 17(1), pages 95-114, March.
    • Handle: RePEc:ren:journl:v:17:y:2025:i:1:p:95-114
    DOI: https://doi.org/10.15353/rea.v17i1.5608
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    More about this item

    Keywords

    Corruption; Human Capital; Dynamic Panel Data Models; Economic Growth; Natural Resources;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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