Extending the concept of the resource curse: Natural resources and public spending on health

Lara Cockx, Nathalie Francken

Research output: Contribution to journalArticle

32 Citations (Scopus)

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 investigate the link between natural resource wealth and public health expenditures in light of the hypothesis that resource wealth as a source of unearned state income enhances state autonomy and increases volatility, which leads to policies that fail to prioritize human development. Using a large panel dataset of world countries covering the period from 1995 to 2009, 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 Corporate Social Responsibility operations, specifically in the health sector.

Original languageEnglish
Pages (from-to)136-149
Number of pages14
JournalEcological Economics
Volume108
DOIs
Publication statusPublished - Dec 1 2014
Externally publishedYes

Keywords

  • Health
  • Natural resources
  • Political economy
  • Public spending

ASJC Scopus subject areas

  • Environmental Science(all)
  • Economics and Econometrics

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