Institutional Quality, Natural Resources and Human Development
Majid Maddah *
Faculty of Economics, Management and Administrative Sciences, Semnan University, Central Administration of Semnan University, Campus 1, Semnan, I. R. of Iran.
Mohamad Hosein Arab
Faculty of Economics, Management and Administrative Sciences, Semnan University, Central Administration of Semnan University, Campus 1, Semnan, I. R. of Iran.
*Author to whom correspondence should be addressed.
Abstract
Some researchers have found that natural resources affect the economic performance of resource-rich countries. This paper examines the effect of natural resources rent on human development and also tests the resource curse hypothesis in 11 selected countries rich in resources during the period 2000-2019 based on panel data model. Concerning the fact that institutional quality can influence the functioning of the resource curse hypothesis, the moderating role of institutional quality in the relationship between the natural resources and human capital is also tested. Based on the results of the estimation of model, firstly, the quality of institutions has a positive effect on human development. Secondly, natural resource rent has a significant negative impact on human development. Tthirdly, improving the quality of institutions moderates the negative impact of natural resources on human development and affects the function of the resource curse hypothesis.
Keywords: Human development, institutional quality, natural resources, panel data