Natural resources and exports diversification in Cameroon: Does corruption matter?

Abstract

This paper examines the role of corruption in the relationship between natural resources and exports diversification 1980–2020) through the bound test of co-integration and the Fully Modified Ordinary Least Square (FMOLS). The main findings reveal that, natural resource accentuates export diversification. However, in the long run, oil resources accentuate export diversification while forest and mineral resources decrease export diversification. Also, in the short run, executive corruption accentuates with no limit, the concentration effect of natural resources on export diversification. While in the long run, executive corruption instead mitigates the negative effect of natural resources irrespective of their type on export diversification. Natural resources curse export diversification if the executive corruption is below certain thresholds. These findings imply that in the Cameroonian context of cumbersome and bureaucratic regulations, the cost of corruption is lesser than cost the of administrative bottlenecks, leading to the corollary that corruption may favors export diversification when production and export processes present barriers that exceed a certain threshold. Cameroon authorities should therefore curb these cumbersome and bureaucratic procedures that are costly and that harm export diversification.