Title: Extending the concept of the resource curse: natural resources and public spending on health
Authors: Cockx, Lara
Francken, Nathalie
Issue Date: Jan-2014
Publisher: IOB
Series Title: IOB Working Paper 2014.01 pages:1-29
Abstract: This paper extends the concept of the resource curse by studying whether and through which transmission channels natural resource wealth affects social spending. Even
though the availability of vast natural capital reserves has commonly been linked to the neglect of human development, most of the literature has continued to focus on economic performance.
This paper is the first to empirically explore the link between natural resource wealth and public health expenditures in light of the hypothesis that the availability of resource wealth as a source of unearned state income enhances state autonomy, which leads to policies that fail to prioritize human development. Using a large panel dataset of world countries covering the period
from 1991 to 2010, we find a robust, significant inverse relationship between natural resource dependence, and even abundance, and public health spending over time. The effect remains significant after controlling for state autonomy, volatility, and other factors. These findings have
implications for national authorities as well as the extractive industry. Governments should be made accountable for natural resource wealth and correct taxation could provide additional resources, earmarked for health. The extractive industry could increase their investments in sustainable Social Corporate Responsibility operations, specifically in the health sector.
ISSN: 2294-8643
Publication status: published
KU Leuven publication type: ER
Appears in Collections:Research Center of Development Economics, Leuven
LICOS - Centre for Institutions and Economic Performance, Leuven

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