Natural resources curse: A reality in Africa

Abstract

The objective of this study is to identify the institutional and economic indicators that are more negatively affected by natural resource rents in Africa. For this purpose, it used the two-stage least squares (2SLS)and data of the World bank (WDI and WGI)for the period 1992–2016.The results show that the most institutional problems caused by natural resources rents are by order: corruption; problem of rule of law or justice; inefficient public administrations; bad regulation; lack of voice and accountability; political instability. Natural resources rents also cause volatility of GDP per capita, leading to low level of physical and human capital accumulation. For these reasons, African countries should promote good governance and diversify their economies.