Natural resources: A curse on welfare?

Abstract

Nowadays, the evaluation and monitoring of social welfare in all countries, particularly in developing countries, has become one of the most important and inevitable problems for governments. Since most developing countries have abundant natural resources, despite the common perception, these resources not only have not increased social welfare in these countries, but they also resulted in an unusual decrease in the social welfare. In this study, we intend to use panel quantile regression to investigate the impact of the dependence on natural resources and Institutional quality index on social welfare in fuel exporting developing countries during the period 2007–2020. The results showed that the effect of the dependence on natural resources on welfare is negative and significant. Also, it indicates that the phenomenon of the welfare curse is prevalent in fuel exporting developing countries. In addition, the effect of Institutional quality index on the welfare of fuel exporting developing countries is positive and significant. According to the results, the effect of other control variables like human development index, uemployment, public service index, and general government final consumption expenditure on welfare is negative and significant. The results of our research are very useful for policymakers. According to the results, we suggest that policymakers enact laws to prevent corruption. Also, take steps in the direction of transferring from the export of natural resources to the export of industrial products.