Natural resource wealth and public social spending in the Middle East and North Africa

Lara Cockx and Nathalie Francken

No 2015.03, IOB Working Papers from Universiteit Antwerpen, Institute of Development Policy (IOB)

Abstract: This paper investigates the discrepancy between the vast natural resource wealth and the relatively low spending on human development in the Middle East and North Africa (MENA) region. Our results show a robust, significant inverse relationship between natural resource dependence and public health spending, and natural resource dependence and public education spending over time. The effects remain significant after controlling for income, aid, the age structure of the population, and the quality of institutions. Moreover, we find a particularly strong resource curse effect of oil on social spending. Despite the mounting burden on MENA‘s economic development models due to significant population growth and the pressing need for diversification, countries have been unable or unwilling to convert natural resource wealth into increased social spending. Governments should be strongly encouraged to manage their natural wealth in an accountable and equitable manner that follows international best practice. Correct taxation of natural resource, and especially, oil wealth should provide the governments with adequate budgets to fund a desirable level of public health provision. Finally, the equity of distribution of education spending could be improved.

Keywords: public social spending; Middle East; North Africa (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015-03
New Economics Papers: this item is included in nep-ara, nep-dev and nep-ene
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Natural resource wealth and public social spending in the Middle East and North Africa (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:iob:wpaper:201503

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