The social development effects of primary commodity export dependence

Abstract

On the question of whether natural resources are a curse for growth, the jury is still out. While waiting for a decision, we study whether resource intensity has any effect on social development over and above the effect it might have on income or growth. We measure social development by a combination of health and education outcomes and resource intensity by the share of primary commodities in total merchandise exports. We find that, after controlling for per-capita income and other macroeconomic and institutional factors, a higher dependence on primary commodity exports is negative for social development. The transmission mechanism seems to operate via income inequality and macroeconomic volatility. © 2010 Elsevier B.V