Deciphering the resource wealth enigma: Unraveling the interplay of institutional quality, economic diversity, and R&D in mitigating the resource curse

Abstract

The study explores the multipart dynamics of resource wealth, institutional quality, economic diversity, R&D outputs and their interplay with “resources curse” by analyzing data from 2008 to 2019 for 18 G member countries. The study discovers that natural resource abundance can be a double-edged sword, potentially restricting R&D operations and offering the financial ability to fund these ventures. It clarifies that the “curse” depends on a wide range of economic, institutional, and sociopolitical conditions rather than an inevitable result. The strength of the institutions and economic diversity stand out as important mitigating factors among these elements. The study emphasizes how crucial institutional stability and openness are to protecting R&D projects from the resource curse's damaging effects. It encourages them to create a varied economic basis that fosters innovation and protects against resource-based vulnerabilities. The study also highlights how green, sustainable R&D activities can promote economic growth and environmental protection. It envisions a balanced growth trajectory in which natural resource riches are deliberately used to build a sustainable, innovation-driven future. The study promotes proactive policy initiatives and global collaboration among G20 economies to turn the resource curse into a driver for innovation and sustainable economic growth. This study provides valuable insights for policymakers, academics, and practitioners by demonstrating the nuanced relationship between natural resource richness and R&D activity in G20 economies. It adds to the conversation about sustainable economic development by challenging the international community to reconsider the myth of resource plenty and how it affects creativity.