Natural resources, institutions and economic development in Africa

  • Augustin Fosu
  • Dede Gafa
Keywords: Natural resources, Institutions, Africa

Abstract

This article, first, examines the association between resource rents, institutions and economic growth in Africa, as well as the performance of resource-rich and non-resource-rich countries on institutional quality and political governance. The findings suggest that resource rents failed to contribute to long-term growth on the continent. Additionally, higher resource rents are associated with relatively weak institutions. Second, using historical data, the study tests the validity of the resource-curse hypothesis in two resource-rich countries, namely, Nigeria and Botswana. Although both countries have derived substantial revenues from their natural resource sectors, the distributed-lag results show that Nigeria may have experienced a natural resource curse, while Botswana has not. These findings are presumed, based on the extant literature, to be explained by differences in the level of institutional quality.

Keywords: Natural resources; Institutions; Africa

Published
2019-06-21
Section
Articles

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print ISSN: 2042-1478