Transmission channels of the resource curse in Africa: A time perspective

Alexandre Henry
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Alexandre Henry: BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique

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Abstract: Most sub-Saharan African countries share the following characteristics: a strong dependence on natural resources, weak institutions, and relatively low growth levels preventing them to catch up with the rest of the developing world. This paper aims to unfold the natural resource curse by introducing a time perspective: long-term versus short-term effects. Following the two-step Engle and Granger procedure, an error-correction model is performed after a cointegration estimation. In addition, the paper clusters the countries to differentiate the natural resource curse mechanisms by level of institutional quality. Results are three-fold. On the long run, the negative impact of the dependence is confirmed for all categories. Countries with weak institutions are more vulnerable to the curse because the resource dependence not only negatively impacts long-term growth but also adversely impacts the recovery process. Finally, in a strong institutional environment, results point towards a potential positive impact of natural resources during recovery process.

Keywords: Resource curse; Africa; Institutions; Transmission; Channel; ECM (search for similar items in EconPapers)
Date: 2019-11-30
Note: View the original document on HAL open archive server: https://hal.science/hal-03488691v1
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Citations: View citations in EconPapers (22)

Published in Economic Modelling, 2019, 82, pp.13-20. ⟨10.1016/j.econmod.2019.05.022⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03488691

DOI: 10.1016/j.econmod.2019.05.022

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