Nonrenewable Resources, Income Inequality and Per Capita GDP : An Empirical Analysis
This analysis examines the relationship between nonrenewable resource dependence, economic growth and income inequality. It uses a two-equation system in which the Gini index and GDP per capita are the dependent variables and the stock of nonrenewa...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/09/26805462/nonrenewable-resources-income-inequality-capita-gdp-empirical-analysis http://hdl.handle.net/10986/25147 |
| Summary: | This analysis examines the relationship
between nonrenewable resource dependence, economic growth
and income inequality. It uses a two-equation system in
which the Gini index and GDP per capita are the dependent
variables and the stock of nonrenewable resources as a share
of national wealth -- i.e. resource dependence -- is the
independent variable. Using a dataset that includes
information on 43 countries from 1980 to 2012, this paper
estimates several model specifications in order to check the
robustness of the results under different assumptions and to
account for income-group-related heterogeneity among
countries. The baseline model provides strong evidence that
natural resource dependence is negatively correlated with
both per capita GDP and the Gini index; in other words,
resource dependence is associated with lower income levels,
but also with a more equal distribution of income.
Interestingly, however, after controlling for country income
group, the sign and magnitude of these relationships appear
to become dependent on national-level structural
characteristics. Among higher-income countries, greater
nonrenewable natural resource dependence is associated with
lower income inequality, while there is no statistically
significant correlation with GDP per capita. Among the
lower-income group, greater dependence on nonrenewable
natural resources is associated with both higher levels of
income inequality and lower per capita GDP. Further analysis
focusing on a subsample of non-renewable resource rich
countries confirms these findings. |
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