nep-res New Economics Papers
on Resource Economics
Issue of 2023‒05‒08
five papers chosen by

  1. Locus of Control and Economic Decision-Making: A Field Experiment in Odisha, India By Ahsan Jansson, Cecilia; Patil, Vikram; Vecci, Joe; Chellattan Veettil , Prakashan; Yashodha, Yashodha
  2. Drought and Political Trust By Ahlerup, Pelle; Sundström, Aksel; Jagers, Sverker C; Sjöstedt, Martin
  3. Sustainable Economic Growth: A Critical Assessment of SDG 8.1 By Ahlerup, Pelle; Olsson, Ola
  4. Deciding for Others: Local Public Good Contributions with Intermediaries By Andrej Angelovski; Praveen Kujal; Christos Mavridis
  5. Natural Resource Endowments and Growth Dynamics in Africa: Evidence from Panel Cointegrating Regression By Ibrahim A. Adekunle; Olukayode E. Maku; Tolulope O. Williams; Judith Gbagidi; Emmanuel O. Ajike

  1. By: Ahsan Jansson, Cecilia (Department of Economics, School of Business, Economics and Law, Göteborg University); Patil, Vikram (International Rice Research Institute (IRRI), India); Vecci, Joe (Department of Economics, School of Business, Economics and Law, Göteborg University); Chellattan Veettil , Prakashan (International Rice Research Institute (IRRI), India.); Yashodha, Yashodha (International Water Management Institute (IWMI), India)
    Abstract: We study psychological impediments that make it difficult to change be- haviour. In particular, we evaluate the impact of a randomised psychological intervention designed to target locus of control–an individual’s belief in their own ability to influence their outcomes – on the adoption of climate resilient technologies. In the control farmers receive a standard agricultural education. Treatment farmers are assigned to one of three treatments where they receive agricultural training and either: a psychological information treatment providing tools to change belief about one’s sense of control, a crop simulation app – al- lowing farmers to simulate their agricultural decisions and a treatment with both combined. Our sample consists of 1674 farmers from 252 villages in Odisha, India. We find that at baseline, the majority do not believe they can influence their agri- cultural outcomes. However, the interventions have little impact on agricultural behaviour, locus of control or aspirations. We then study explanations.
    Keywords: Psychological Impediments; Locus of Control; Agriculture
    JEL: D01 D91 O13
    Date: 2023–04
  2. By: Ahlerup, Pelle (Department of Economics, School of Business, Economics and Law, Göteborg University); Sundström, Aksel; Jagers, Sverker C; Sjöstedt, Martin
    Abstract: Droughts can affect people’s political trust positively, through rallying effects, or negatively, through blame attribution. We examine how drought conditions affect political trust in the context of Africa. We link high-precision exogenous climate data to survey respondents, 2002–2018, and report moderate negative effects of drought conditions on people’s trust in their president. These negative effects increase with the severity of drought conditions. The political economy of favoritism, where some regions are preferentially treated by rulers, should result in heterogeneous effects across territories. We find that trust increases in capital regions and in leader birth regions during dry conditions. In contrast, when droughts take place in such regions, trust levels fall in other regions. This is in line with the idea that capital regions and leader birth regions could be preferentially treated in the aftermath of droughts. Understanding these processes further is important given their salience because of global warming.
    Keywords: Africa; Drought; Afrobarometer; Trust; Climate change; Disasters
    JEL: D74 H70 O10
    Date: 2023–04
  3. By: Ahlerup, Pelle (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this report, we focus on the Sustainable Development Goal (SDG) target 8.1, stipulating that countries should pursue real GDP per capita growth rates that are in accordance with their national circumstances and that total GDP should grow by more than seven percent a year in the least developed countries. We start by briefly discussing the background of this target and then review some of the existing research on economic growth across the world, starting with growth theory and its predictions concerning the convergence of growth rates and income levels in the short and long term. We also review the extensive empirical work on cross-country income and growth regressions that have accumulated during the last three decades, focusing on recent (pre-covid) and historical patterns regarding the fulfillment of the SDG 8.1 targets. We show that a growth rate in total GDP of seven percent per year has only been observed in about 10 percent of all available country-year observations over history. Growth rates exceeding seven percent were relatively frequent among poor countries during 2000-2009 but not during 2009-2019. Since 2000, the relatively high average growth rates among poor countries have implied that their income levels have steadily converged towards those of richer countries, although at a slow pace. This pattern is manifested in longer periods of sustained growth episodes in poor countries and can probably be explained by successful policy reforms. We also show that about a third of all countries managed to have positive economic growth during 2010-19 while at the same time decreasing their emissions of CO2 from production (decoupling). For poor and rich countries alike, the growth prospects post-covid and after Russia’s invasion of Ukraine, are uncertain.
    Keywords: economic growth; sustainable development goals; convergence; SDG 8.1
    JEL: N10 O47 O57
    Date: 2023–04
  4. By: Andrej Angelovski (Middlesex University); Praveen Kujal (Middlesex University and Chapman University); Christos Mavridis (Gabriele d’Annunzio University of Chieti-Pescar)
    Abstract: Given the prevalence of local public goods, whose broader use is often limited by distance and borders, we propose a potential solution to the free-riding problem by having each participant/beneficiary delegate the public good contribution decision to a non-local intermediary who neither puts in own endowment into the public good nor benefits from it. Intermediaries make decisions under two compensation mechanisms where the incentives for the intermediary are either non-aligned (fixed) or aligned (variable) with those of the beneficiary. We find that the use of intermediaries, regardless of whether their compensation is aligned or not with that of the beneficiary, significantly increases contributions to the provision of the public good. We conclude that individuals behave differently when they (formally) make decisions for someone else even if their incentive structures are identical.
    Keywords: Public goods, intermediaries, delegation
    JEL: H4 C91 D90
    Date: 2023
  5. By: Ibrahim A. Adekunle (Babcock University, Nigeria); Olukayode E. Maku (Olabisi Onabanjo University, Nigeria); Tolulope O. Williams (Olabisi Onabanjo University, Nigeria); Judith Gbagidi (Africa PPP Advisory Services); Emmanuel O. Ajike (Babcock University, Nigeria)
    Abstract: Purpose With heterogeneous findings dominating the growth and natural resources relations, there is a need to explain the variances in Africa’s growth process as induced by robust measures of factor endowments. This study used a comprehensive set of data from the updated database of the World Bank to capture the heterogeneous dimensions of natural resource endowments on growth with a particular focus on establishing complementary evidence on the resource curse hypothesis in energy and environmental economics literature in Africa. These comprehensive data on oil rent, coal rent, and forest rent could provide new and insightful evidence on obscure relations on the subject matter. Design/methodology/approach This paper considers the panel vector error correction (PVECM) procedure to explain changes in economic growth outcomes as induced by oil rent, coal rent and forest rent. The consideration of the (PVECM) was premised on the panel unit root process that returns series that were cointegrated at the first-order differentials. Findings The paper found positive relations between oil rent, coal rent and economic development in Africa. Forest rent, on the other hand, is inversely related to economic growth in Africa. Trade and human capital are positively related to economic growth in Africa, while population growth is negatively associated with economic growth in Africa. Research limitations/implications Short-run policies should be tailored toward the stability of fiscal expenditure such that the objective of fiscal policy, which is to maintain the condition of full employment, economic stability, and stabilise the rate of growth, can be optimised and sustained. By this, the resource curse will be averted, and productive capacity will increase, leading to sustainable growth and development in Africa, where conditions for growth and development remains inadequately met. Originality/value The originality of this paper can be viewed from the strength of its arguments and methods adopted to address the questions raised in this paper. This study further illuminated age-long obscure relations in the literature of natural resource endowment and economic growth by taking a disaggregated approach to the component-by-component analysis of natural resources factors (the oil rent, coal rent and forest rent) and their corresponding influence on economic growth in Africa. This pattern remains underexplored mainly in previous literature on the subject. Many African countries are blessed with an abundance of these different natural resources in varying proportions. The misuse and mismanagement of these resources along various dimensions have been the core of the inclination toward the resource curse hypothesis in Africa. Knowing how growth conditions respond to changes in the depth of forest resources, oil resources and coal resources could be a useful pointer in Africa's overall use and management. This study contributed to the literature on natural resource-induced growth dynamics by offering a generalisable conclusion as to why natural resource-abundance economies are prone to poor economic performance. This study further asks if mineral deposits are a source or reflection of illgrowth and underdevelopment in African countries.
    Keywords: Natural Resource Endowment; Economic Growth; Resource Curse Hypothesis; PVECM; Africa
    JEL: C33 O44
    Date: 2023–01

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