The distributional dimension of the resource curse: Commodity price shocks and income inequality

Mohtadi, Soran; Castells‐Quintana, David

doi:10.1016/j.strueco.2021.08.002

Cited by 23 publications

(10 citation statements)

References 50 publications

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“…The results in Table 6 show that coal rent has on average a positive and statistically significant effect (Column 1) on inequality, suggesting that an increase in coal rent leads to an increase in income inequality. This result is consistent with the work of Mohtadi and Castells-Quintana (2021) who analyze the effect of natural resources on inequality. The results in Column 2 show that coal rents have a statistically insignificant effect for lower quantiles (Q10) but a statistically positive and significant effect for higher quantiles (Q25–Q90).…”

Section: Resultssupporting

confidence: 92%

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Revisiting the effects of natural resources on income inequality in Sub-Saharan Africa

Avom

Ovono

Nkoa

2022

IJDI

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Purpose This study aims to analyze the effects of natural resource rents on income inequality. Design/methodology/approach This study uses a panel quantile regression (QR) approach for 42 Sub-Saharan African (SSA) countries over the period 1998–2018. Findings The results show that natural resource rents have a negative and statistically significant effect on income inequality. Regarding the types of resources, the results show that coal rents increase inequality, while forestry and oil rents reduce income inequality. The results also show that the effects of mining and gas rents vary along the income inequality distribution. Finally, the results reveal a negative and significant effect of natural resource rents on income inequality in all sub-regions except Southern Africa. Practical implications The results suggest that the SSA Governments should intensify the implementation of income redistribution policies such as family allowances to poor families with multiple children and public sector job creation. SSA policymakers should also increase access to electricity, and internet, and allocate a portion of oil revenues to create an intergenerational sovereign wealth fund. Originality/value First, few studies have analyzed the effects of various types of natural resource rents on income inequality. To this end, this study used the QR method to examine the impact of natural resource rents on inequality, by laying emphasis on various types of natural resources. This study takes into account the likely heterogeneity across countries that may exist when considering a sample such as SSA countries, by examining the effects in the different sub-regions that make up this part of Africa (Central Africa, West Africa, Southern Africa and East Africa).

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Section: Resultssupporting

confidence: 92%

“…For some authors, natural resources positively affect income inequality. Mohtadi and Castells-Quintana (2021) analyze the effect of natural resources on income inequality. They show that natural resources increase income inequality between populations.…”

Section: Review Of the Literaturementioning

confidence: 99%

Revisiting the effects of natural resources on income inequality in Sub-Saharan Africa

Avom

Ovono

Nkoa

2022

IJDI

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“…This implies that rents from natural resources is not sufficiently invested in economic sectors in SSA. The findings conform with Mohtadi and Castells-Quintana (2021), Davis (2020) and Hartwell et al (2019), who showed that natural resources increase income inequality but contrast with Parcero and Papyrakis (2016), Kim and Lin (2018) and Avom et al (2022), who found that rents from natural resources tend to reduce income inequality between populations.…”

Section: Resultssupporting

confidence: 87%

“…Considering the mixed relationship between natural resources rents and income inequality (Avom et al , 2022; Davis, 2020; Hartwell et al , 2019; Kim and Lin, 2018; Mohtadi and Castells-Quintana, 2021), human capital can serve as a catalyst to reduce the gap between natural resources rents and income inequality. Otherwise, rents from natural resources would be invested in human capital to reduce income inequality.…”

Section: Introductionmentioning

confidence: 99%

“…Empirical evidence has revealed that the relationship between natural resources rents and income inequality is controversial. Mohtadi and Castells-Quintana (2021), Davis (2020), Hartwell et al (2019) and Farzanegan and Krieger (2019) showed that natural resources increase income inequality between populations. According to Hartwell et al (2019), these results occur in the presence of a low level of democracy, so high level of democracy can allow natural resources to reduce income inequality.…”

Section: Introductionmentioning

confidence: 99%

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Effect of natural resources rents on income inequality in sub-Saharan Africa: exploring the direct and indirect transmission mechanisms

Akpa

2023

IJDI

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Purpose The reduction of income inequality and the ways to fight against it are source of debate among scientific communities and policymakers. Rents from natural resources that African countries are endowed with remain one way to cope with income inequality, but its influence on income inequality is mixed. Thus, the purpose of this paper is to explore the direct and indirect transmission mechanisms through which natural resources rents can affect income inequality in sub-Saharan Africa. Design/methodology/approach This study obtained data on income inequality from the Standardised World Income Inequality Data database, natural resources rents from World Bank’s Development Indicators and education from United Nations Development Programme for the period 1990–2018. It was analysed using system generalised method of moments. Findings The results of this study showed that natural resources rents solely increased income inequality, but its interaction with education significantly reduced income inequality. Research limitations/implications These findings suggest that the reduction of income inequality by natural resources rents passes through a good education system in sub-Saharan African countries. Originality/value In previous studies, authors analysed the role of education in the relationship between natural resources rents and income inequality by inserting the two variables separately in the model. But in this paper, the author analysed the role of education in the relationship between natural resources rents and income inequality by using the interaction of natural resources rents and education.

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The Impact of Natural Resource Depletion on Climate Change Vulnerability and Income Inequalities in Africa

Asiedu,

Amidu,

Halidu

2024

Advances in African Economic, Social and Political Development

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The distributional dimension of the resource curse: Commodity price shocks and income inequality

Cited by 23 publications

References 50 publications

Revisiting the effects of natural resources on income inequality in Sub-Saharan Africa

Revisiting the effects of natural resources on income inequality in Sub-Saharan Africa

Effect of natural resources rents on income inequality in sub-Saharan Africa: exploring the direct and indirect transmission mechanisms

The Impact of Natural Resource Depletion on Climate Change Vulnerability and Income Inequalities in Africa

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