Resources curse and sustainable development perspective: Fresh evidence from oil rich countries

Zhun Zheng, Alexander Lisovskiy, László Vasa, Wadim Strielkowski and Yanwu Yang

Resources Policy, 2023, vol. 85, issue PA

Abstract: In recent years, many regions that are rich in natural resources have fallen behind other countries that have fewer natural resources in terms of economic growth. This study examines the role of resource rents on national income of Arab world over the period of 1989–2021. We use mineral and oil rents to capture the resource rents. In order to determine the long-term effects of resource rents on the national income of the Arab world, this study employs the econometric methods of DOLS and FMOLS. In addition to that, the FMOLS approach, which is an asymptotically unbiased and effective estimator, is utilized throughout this study. These approaches can help to address some of the issues that arise in the analysis of time series data, is used in this study to control for endogeneity as well as serial correlation. We find that oil rents are harmful for economic growth, which approves the resource curse phenomena in case of Arab world. The abundance of natural resources in the Arab world could persuade its officials to spend more money on consumption and less on investments in physical capital, which would be detrimental to economic progress. Moreover, reliance on natural resources can lead to a scenario known as the Dutch Disease.

Keywords: Oil rich economies; Sustainable development perspective; Arab world; Time series (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:85:y:2023:i:pa:s0301420723004099

DOI: 10.1016/j.resourpol.2023.103698

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