2012 Fabrizio Carmignani - The Geographical Dimension of the Development Effe [retrieved_2025-01-26]

Abstract

  • The study investigates the contribution of natural resource intensity to long-term development in terms of:

    • Per-capita income

    • Institutional quality

    • Education

  • Findings indicate that the impact of natural resources differs by region, with positive outcomes generally except in Sub-Saharan Africa (SSA), where contributions can be negative due to adverse conditions like disease.

  • Keywords include Natural resources, Development, Institutions, and Schooling.

Introduction

  • SSA is noted as the poorest region despite having substantial reliance on natural resources.

  • Key statistics:

    • Per-capita GDP in SSA (2010): $2041

    • Comparatively lower than South Asia ($2941), East Asia ($5991), Middle East ($9131), and Latin America ($10117).

    • Average annual growth rate of per-capita GDP in SSA since 1980: 0.4%.

    • In 2009, SSA had the highest ratio of fuel and primary commodity exports to merchandise exports.

Main Findings

  • Investigation of natural resource effects leads to:

    1. Per-capita Income Impact

      • Generally positive except in SSA, where it's negligible or potentially negative.

    2. Institutional Quality

      • Natural resources negatively affect institutional quality specifically in SSA.

    3. Human Capital Accumulation

      • Impeded more severely in SSA by natural resources than in other regions.

    4. Combined Adverse Effects

      • The interaction of poor disease environments with rich natural resources is pivotal in SSA's development challenges.

Historical Context and Literature Review

  • Various explanations of SSA's slow economic progress, including:

    • Role of resource intensity (Deaton & Miller 1996; Sachs & Warner 1997).

    • Other systemic issues: poor governance, colonial past, and lack of social capital.

  • Importance of addressing how these factors influence economic performances.

Methodology and Econometric Set-Up

1. Estimation Model for Income

  • Regression equation measures the effect of natural resource intensity on GDP.

    • Included variables emphasize the geographical impact on resource-income relationships.

  • Natural resource abundance is quantified using the World Bank's natural wealth assessments.

2. Institutions and Education

  • Expanded analysis on how natural resources affect:

    • Institutional quality (e.g., protection against expropriation risk).

    • Educational outcomes (years of schooling).

Results of the Analysis

Cross-Regional Differences

  • Evidence shows natural resources generally support development but act negatively in SSA.

  • Findings show:

    • Statistical models indicating that resource intensity leads to weak or negative GDP growth in SSA while positively affecting other regions.

    • The historical context combined with current disease environments plays a crucial role in these findings.

Transmission Mechanisms

  • Analysis suggests natural resources' positive or negative development impacts are mediated through:

    • Institutional quality

    • Educational attainment

  • Implications emphasize the need for targeted policy reforms.

Disease Environment Interaction

  • Strong correlation identified between natural resource availabilities, regional disease environments, and resultant economic performance disparities.

Conclusion and Implications

  • SSA's unlikeliness to benefit from natural resource abundance is attributed to its colonial history and the challenging disease environment.

  • Future focus areas can enhance development potential by addressing healthcare and institutional quality to mitigate the lasting effects of colonization.