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Extending the concept of the resource curse: natural resources and public spending on health

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  • Cockx, Lara
  • Francken, Nathalie

Abstract

This paper extends the concept of the resource curse by studying whether and through which transmission channels natural resource wealth affects social spending. Even though the availability of vast natural capital reserves has commonly been linked to the neglect of human development, most of the literature has continued to focus on economic performance. This paper is the first to empirically explore the link between natural resource wealth and public health expenditures in light of the hypothesis that the availability of resource wealth as a source of unearned state income enhances state autonomy, which leads to policies that fail to prioritize human development. Using a large panel dataset of world countries covering the period from 1991 to 2010, we find a robust, significant inverse relationship between natural resource dependence, and even abundance, and public health spending over time. The effect remains significant after controlling for state autonomy, volatility, and other factors. These findings have implications for national authorities as well as the extractive industry. Governments should be made accountable for natural resource wealth and correct taxation could provide additional resources, earmarked for health. The extractive industry could increase their investments in sustainable Social Corporate Responsibility operations, specifically in the health sector.

Suggested Citation

  • Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: natural resources and public spending on health," IOB Working Papers 2014.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
  • Handle: RePEc:iob:wpaper:201401
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. de Soysa, Indra & Gizelis, Ismene Theodora, 2016. "More heat, less light! The resource curse & HIV/AIDS: A reply to Olivier Sterck," Social Science & Medicine, Elsevier, vol. 150(C), pages 268-270.
    2. Amin Karimu & George Adu & George Marbuah & Justice Tei Mensah & Franklin Amuakwa-Mensah, 2017. "Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 107-130, November.
    3. Wigley, Simon, 2017. "The resource curse and child mortality, 1961–2011," Social Science & Medicine, Elsevier, vol. 176(C), pages 142-148.
    4. repec:taf:ginixx:v:44:y:2018:i:1:p:88-106 is not listed on IDEAS
    5. Kim, Dong-Hyeon & Lin, Shu-Chin, 2017. "Human capital and natural resource dependence," Structural Change and Economic Dynamics, Elsevier, vol. 40(C), pages 92-102.
    6. repec:ebl:ecbull:eb-17-00542 is not listed on IDEAS
    7. Morten Endrikat, 2017. "Natural resource rents, autocracy and the composition of government spending," MAGKS Papers on Economics 201727, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    9. Gadom Djal Gadom & Armand Mboutchouang Kountchou & Gbetoton Nad ge Ad le Djossou & Gilles Quentin Kane & Abdelkrim Araar, 2017. "The impact of oil exploitation on wellbeing in Chad," Working Papers PMMA 2017-06, PEP-PMMA.

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    Keywords

    resource curse; natural resources; public spending; health care;

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