Natural resource extraction and sustainable development: A case involving Pacific Island countries

This paper presents results from an investigation on the impact of resource rent on sustainable development in three Pacific countries from 1990 to 2019 using the autoregressive distributed lag bounds testing approach. The results show a significant negative relationship between natural resource rents and sustainable development in Fiji and Solomon Islands and no such relationship in Vanuatu. These findings have important policy implications, suggesting the need for strategies to enhance the value of resource revenue through value addition and to allocate a greater proportion of the revenue to investment in human and physical capital, in line with the "Hartwick rule".