Re-examining the curse of natural resources in SSA: New evidence from disaggregated natural resources and types of corruption

Abstract

Understanding how corruption affects the relationship between natural resources and growth has profound implications for sustainable development goals in Sub-Saharan Africa (SSA). This study investigates the nexus between natural resources, economic growth, and corruption in SSA from 1985 to 2022, by employing a Panel Smooth Transition Regression model. Results indicate that corruption distorts natural resources and lowers economic growth. The magnitude of the effect of corruption depends on the type of corruption. The impact of political corruption is more relevant than the others form of corruption. In a low corruption regime, mineral, oil, and forest resources do not affect growth; (b) in a high corruption regime, oil and forest resources hinder growth whereas mineral resources lead to higher economic growth. The analysis highlights the need for policy measures that encourage sustainable economic development and promoting reinforcement of institutional quality.