Politics and the natural resource curse: Evidence from selected African states

This paper analysed political aspects of the resource curse in selected African states. The paper drew from the fact that the African region has extensive (untapped) natural resources deposits that, if utilised, can promote sustainable economic development. But despite the presence of these natural resources, the African region is poverty-stricken and still under-developed. Literature identified politics as among the factors that affect Africa’s capacity to invest revenue from natural resources. Studies showed that there are close links between politics and the management of extractives. The study employed the PMG (ARDL) and the FMOLS for the period 1995–2016. Results from the study showed a positive relationship between efficient functioning of government and resource rents. There is also evidence for causality running from efficient functioning of government to resource rents and not vice versa. This shows that government performance is crucial for better performance in the natural resource extraction sector. Based on the findings, this study recommends that governments in African countries should improve on governance and the way the public sector institutions function. Harnessing the weak and politically fragile public institutions is important in order to kick start markets. The effective functioning of government institutions can be strengthened by eliminating corruption, stabilising property rights and investing in fiscal capacity.