What is it about?

In this study, we propose a new approach for the visual inspection of interactions between human development and economic growth and a set of variables that reflect the dependence of mineral resources. We focus on the ten African countries with the highest share of mineral exports compared to total exports in the period from 2007 to 2016. First, we provide a descriptive analysis and we rank the countries according to their average annual growth in relation to a set of proxies of resource dependence and economic indicators during the sample period. Second, we cluster the different states by means of a dimensionality-reduction technique that enabled synthesising the information in the rankings into two factors: (a) economic growth and human development, and (b) growth in mineral resource dependence. Finally, we project all countries into a perceptual map to visually analyse the interactions between countries and indicators.

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Why is it important?

We observe four clusters that roughly correspond to the main African regions, and whose distribution shows a slightly negative slope (indicative of a weak inverse relationship between mineral dependence and development). Regarding the interactions among variables, we observe a tenuous negative association between average growth in human development and the relative weight of mineral rents. These results, coupled with the fact that the average growth in resource rents does not materialise in higher economic growth, indicate that corruption may be impeding economic development, especially if it is understood under a more inclusive perspective that incorporates health and education. This finding underscores the need to promote institutional quality and to develop a mining strategy to help revert the effects of the resource curse in mineral-dependent African countries. Accordingly, we propose a series of policy measures based on four main objectives: competitiveness, transparency, sustainability and inclusiveness.

Perspectives

This study shows the potential of dimensionality-reduction and data-visualisation techniques to capture the complex set of linkages among natural resource dependence, human development and other economic factors, as well as for the positioning of economies according to the dynamic interplay among them. Our goal is to provide researchers with an alternative approach to assessing the resource curse and to identify key attributes in the positioning of economies.

Oscar Claveria
AQR-IREA, Univeristy of Barcelona

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This page is a summary of: Natural resources and human development: Evidence from mineral-dependent African countries using exploratory graphical analysis, Resources Policy, March 2020, Elsevier,
DOI: 10.1016/j.resourpol.2019.101535.
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