The Geographical Dimension of the Development Effects of Natural Resources

Abstract

We study the contribution of natural resource intensity to long-term development along different dimensions: per-capita income, institutional quality, and education.We allow natural resources to affect these dimensions differently in different regions of the world. The evidence suggests that natural resources are generally a positive driver of development, but in Sub-Saharan Africa (SSA) their contribution is almost negligible, if not even negative.We explain these cross-regional differences with the fact that in SSA more than anywhere else large resource endowments are combined with a particularly bad disease environment. Some historical evidence and formal econometric results support this hypothesis.