London School of Economics EOPP: Economic Organisation and Public Policy Programme LSE
EOPP: Economic Organisation and Public Policy Programme

Current EOPP Research:
The Rise of China and the Natural Resource Curse in Africa

Gerard Padro i-Miquel (with Erik Meyersson, Stockholm University and Nancy Qian, Brown University)

Abstract:

This paper studies the causal impact of China’s rising demand for natural resources (NR) on Sub-Saharan African political and economic development. We separately instrument for NR exports to China, to the World, to the U.S. and India with the interaction terms of a African country’s NR endowment and the demand for those resources for the respective buyers. We find that exporting NR to China is unique in having large positive effects on economic growth and investment, but is not alone in it’s detrimental effects on human rights. Exporting to the U.S. also has similar negative effects on human rights outcomes, whereas exporting to India improves human rights. Exporting NR overall has no effect on economic growth but has potentially negative effects on political institutions. Our results suggest that the commonly cited natural resource curse embodies heterogenous effects of exporting NR. We provide strong novel evidence that the characteristics of the trading partner matter.

Related Paper

The Rise of China and the Natural Resource Curse in Africa