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In e na ional Jou nal o Social and Educa ional Inno a ion
Vol. 12, Issue 24, 2025
ISSN (p in ): 2392 – 6252
eISSN (online): 2393 – 0373
DOI: 10.5281/zenodo.17278578
RESOURCE DEPENDENCE, INSTITUTIONAL QUALITY,
AND ECONOMIC GROWTH DYNAMICS:
A SYSTEM GMM ANALYSIS FOR SUB-SAHARAN AFRICA
Emmanuel Imuede OYASOR
Depa men o Accoun ing Science
Wal e Sisulu Uni e si y, M ha ha, Sou h A ica
[email p o ec ed]
Abs ac
This s udy in es iga es he dynamic ela ionship be ween na u al esou ce dependence,
ins i u ional quali y, and economic g ow h in Sub-Saha an A ica (SSA) o e he pe iod 1990–
2023. Using a dynamic panel da a model es ima ed h ough Sys em Gene alized Me hod o
Momen s (Sys em GMM), he analysis add esses endogenei y conce ns while cap u ing he
empo al pe sis ence o g ow h. Resul s e eal ha highe na u al esou ce dependence,
measu ed h ough na u al esou ce en s and expo -based p oxies, signi ican ly hampe s GDP
pe capi a g ow h, which is consis en wi h he esou ce cu se hypo hesis. Howe e , s ong
ins i u ional quali y mi iga es his nega i e e ec , wi h ins i u ional imp o emen s eme ging as
a key enable o sus ainable g ow h. Addi ionally, g oss capi al o ma ion, ade openness, and
labo o ce pa icipa ion posi i ely in luence g ow h dynamics. Sensi i i y analyses and
obus ness checks con i m he s abili y o he esul s ac oss al e na i e speci ica ions and
subsamples. Policy implica ions emphasize he need o ins i u ional e o ms, economic
di e si ica ion, and egional ade in eg a ion o unlock SSA’s g ow h po en ial. The indings
con ibu e o a nuanced unde s anding o how go e nance and s uc u al ac o s condi ion he
de elopmen al ou comes o esou ce- ich economies in A ica.
Keywo ds: Na u al Resou ce Dependence, Ins i u ional Quali y, Economic G ow h, Sub-
Saha an A ica, Sys em GMM, Resou ce Cu se.
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1. In oduc ion
The ela ionship be ween na u al esou ce dependence and economic g ow h in Sub-Saha an
A ica (SSA) has emained a subjec o ex ensi e academic inqui y and policy deba e o e he
pas h ee decades. On he one hand, na u al esou ces a e seen as a po en ial ca alys o
economic ans o ma ion h ough expo ea nings, go e nmen e enues, and o eign
in es men (Sachs & Wa ne , 2001). On he o he hand, he so-called “ esou ce cu se”
hypo hesis posi s ha esou ce- ich coun ies o en expe ience slowe g ow h, go e nance
challenges, and g ea e mac oeconomic ola ili y (Van de Ploeg, 2011). The expe ience o
many SSA coun ies unde sco es he complexi y o his nexus, as abundan esou ce
endowmen s ha e no consis en ly ansla ed in o sus ained economic p og ess (Bha acha yya
& Hodle , 2010). Gi en he egion’s con inued eliance on p ima y commodi ies and he
g owing impo ance o esou ce-based e enues, i is c ucial o e-examine he dynamics o
esou ce dependence and economic g ow h using obus empi ical me hods.
Much o he li e a u e on his opic emains inconclusi e, pa ly due o me hodological
limi a ions and a ia ions in how esou ce dependence is measu ed. While ea ly s udies la gely
elied on c oss-sec ional o ime-se ies da a, mo e ecen con ibu ions ha e employed panel
da a app oaches ha allow o g ea e he e ogenei y and imp o ed in e ence (Ha anek e al.,
2016). Howe e , many exis ing panel s udies s ill ace challenges ela ed o non-s a iona i y,
omi ed a iable bias, and e e se causali y. Add essing hese me hodological issues is
essen ial o es ablish c edible causal ela ionships be ween na u al esou ce dependence and
economic g ow h in SSA (Badeeb, Lean, & Cla k, 2017). Mo eo e , gi en he di e si y o SSA
economies in e ms o esou ce endowmen s, ins i u ional quali y, and policy amewo ks, a
ca e ul sensi i i y analysis using al e na i e p oxies and es ima ion echniques is wa an ed.
The empi ical s a egy in his s udy combines panel uni oo and panel coin eg a ion es s wi h
gene alized me hod o momen s (GMM) es ima ions o add ess endogenei y and dynamic
e ec s. By i s es ablishing he ime-se ies p ope ies o he da a, we mi iga e conce ns o
spu ious eg ession ha o en plague g ow h- esou ce s udies (Ped oni, 2004). Nex , panel
coin eg a ion echniques a e applied o es o long- un equilib ium ela ionships be ween
esou ce dependence and economic g ow h, accoun ing o c oss-sec ional dependence and
he e ogenei y (Phillips & Moon, 1999). Finally, he GMM es ima o , which is pa icula ly
sui ed o dynamic panel models wi h endogenous eg esso s, is used o quan i y he sho - and
long- un impac s o esou ce dependence on g ow h while con olling o ins i u ional and
mac oeconomic ac o s (A ellano & Bo e , 1995; Blundell & Bond, 1998).
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Ano he signi ican con ibu ion o his s udy lies in i s sensi i i y analysis. Recognizing ha
esou ce dependence can be p oxied in mul iple ways—including esou ce expo s as a sha e
o GDP, esou ce en s, and esou ce p oduc ion indices (Wo ld Bank, 2023)—we employ
se e al al e na i e indica o s o assess he obus ness o ou indings. Likewise, we compa e
esul s ac oss di e en es ima ion me hods, including ixed e ec s, di e ence GMM, and
sys em GMM, o ensu e ha he co e esul s a e no d i en by me hodological choices. Such
iangula ion is essen ial o p o iding policymake s wi h eliable insigh s and o con ibu ing
o he b oade academic deba e (B unnschweile & Bul e, 2008).
The ime ame o 1990 o 2023 is pa icula ly pe inen o SSA, as i cap u es key pe iods o
s uc u al adjus men , democ a iza ion, commodi y p ice cycles, and he ecen dis up ions
ela ed o he COVID-19 pandemic and global ene gy ansi ions. The ex ended panel allows
us o explo e no only he a e age long- un e ec s bu also po en ial s uc u al b eaks and
nonlinea i ies in he esou ce-g ow h ela ionship (Collie & Gode is, 2009). Mo eo e , his
pe iod coincides wi h he inc easing emphasis on sus ainable de elopmen goals (SDGs),
which highligh he need o ans o m esou ce weal h in o b oade economic and social well-
being.
This s udy seeks o ad ance he unde s anding o how na u al esou ce dependence in luences
economic g ow h in SSA by adop ing a comp ehensi e empi ical app oach ha add esses key
me hodological challenges and igo ously es s he obus ness o he esul s. The indings will
ha e signi ican implica ions o esou ce go e nance and g ow h s a egies in SSA, especially
as many coun ies g apple wi h ques ions o economic di e si ica ion and esilience in an
inc easingly unce ain global en i onmen .
2. Ma e ials
2.1 Theo e ical Re iew
The ela ionship be ween na u al esou ce dependence and economic g ow h has been
ex ensi ely heo ized in he de elopmen economics and esou ce economics li e a u e. A
cen al pilla o his discou se is he esou ce cu se hypo hesis, which posi s ha coun ies ich
in na u al esou ces o en expe ience slowe o mo e ola ile economic g ow h han hei
esou ce-poo coun e pa s (Sachs & Wa ne , 2001). Ea ly o mula ions o his heo y
p ima ily d ew on neoclassical g ow h models, highligh ing mechanisms such as Du ch
disease, en -seeking beha io , and mac oeconomic ins abili y as key ansmission channels
(Co den & Nea y, 1982; Au y, 1993).
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One p ominen heo e ical s and unde sco es he ole o ins i u ional quali y in media ing he
e ec s o esou ce dependence. Acco ding o Mehlum, Moene, and To ik’s (2006) seminal
amewo k, esou ce weal h can ei he suppo o unde mine g ow h depending on whe he
ins i u ions a e o a "g abbe - iendly" o "p oduce - iendly" na u e. Subsequen s udies ha e
elabo a ed on his p emise, emphasizing ha he p esence o s ong ins i u ions can help
esou ce e enues os e public in es men and di e si ica ion (Boschini, Pe e sson, & Roine,
2013). Empi ical ex ensions o his heo y in he A ican con ex sugges ha ins i u ional
he e ogenei y ac oss Sub-Saha an coun ies c i ically shapes he g ow h- esou ce dynamic
(Bha acha yya & Collie , 2014; Di John, 2015).
Complemen ing he ins i u ional lens, ano he heo e ical pe spec i e cen e s on he s uc u al
ans o ma ion hypo hesis. Na u al esou ce dependence is a gued o in luence he composi ion
o economic ac i i y, o en skewing i owa ds p ima y sec o s a he expense o manu ac u ing
and se ices (Rod ik, 2016). This pa h dependency can inhibi p oduc i i y g ow h and
echnological upg ading, key d i e s o sus ained economic de elopmen . Recen dynamic
gene al equilib ium models show ha esou ce booms can c owd ou skill-in ensi e sec o s,
he eby slowing human capi al accumula ion and long- e m g ow h (Gollin, Jedwab, &
Voll a h, 2016). These indings a e pa icula ly salien o SSA, whe e p ema u e
deindus ializa ion emains a p essing conce n (New a me , Page, & Ta p, 2019).
A hi d heo e ical app oach highligh s he ole o mac oeconomic ola ili y as a ansmission
channel. Commodi y p ice cycles in oduce ex e nal shocks ha disp opo iona ely a ec
esou ce-dependen economies (Cashin, Mohaddes, & Raissi, 2019). In heo e ical e ms,
ola ili y exace ba es unce ain y, discou aging long- e m in es men and os e ing p o-
cyclical iscal beha io (A ezki & B ückne , 2015). Recen s ochas ic g ow h models also
illus a e how epea ed boom-bus cycles can esul in lowe a e age g ow h, pa icula ly in
coun ies wi h limi ed iscal bu e s (Bleaney & Halland, 2021). Fo SSA na ions, which a e
hea ily elian on commodi ies such as oil, me als, and ag icul u al p oduc s, his ola ili y-
g ow h nexus emains highly ele an .
Mo e ecen ly, he sus ainable de elopmen amewo k has expanded he heo e ical discou se
beyond adi ional mac oeconomic ou comes o encompass b oade de elopmen al
dimensions. Theo e ical con ibu ions in his ein posi ha sus ainable managemen o na u al
esou ce weal h equi es in eg a ing economic, social, and en i onmen al objec i es (Ba bie
& Hocha d, 2018). Resou ce dependence, i no managed wi h a long- e m sus ainabili y
pe spec i e, isks unde mining in e gene a ional equi y and en i onmen al esilience (Cus &
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Mihalyi, 2017). Fo SSA coun ies acing he dual challenges o po e y alle ia ion and clima e
change adap a ion, his b oadened heo e ical lens is inc easingly pe inen (UNDP, 2021).
2.2 Empi ical Re iew
Empi ical in es iga ions in o he nexus be ween na u al esou ce dependence and economic
g ow h in Sub-Saha an A ica (SSA) ha e employed di e se me hodologies such as panel
coin eg a ion, dynamic GMM, and h eshold eg essions. The empi ical s ands unde sco e
ou key insigh s: i s , dynamic GMM emains he p eeminen echnique o add ess
endogenei y and pe sis ence in panels; second, long- un ela ionships exis bu a e ypically
cha ac e ized by coin eg a ion wi h endogenous adjus men ; hi d, nonlinea i ies and h eshold
e ec s a e pe asi e, wi h ins i u ional quali y and ade openness as c i ical media o s; and
ou h, mic o-le el e idence e eals localized g ow h bene i s ha may no ansla e in o
sus ained na ional g ow h wi hou suppo i e policy amewo ks.
Odhiambo (2020) uses sys em GMM o demons a e how inancial de elopmen media es
esou ce-g ow h linkages, emphasizing he me hod’s abili y o add ess endogenei y and sus ain
obus in e ence in panels. Oguzie e al. (2023) apply sys em GMM on mine al en s and
g ow h ac oss 13 SSA coun ies o co ec o simul anei y, measu emen e o , and unobse ed
he e ogenei y.
Panel coin eg a ion s udies u he subs an ia e long- un equilib ia be ween esou ce indica o s
and GDP pe capi a. A no able example is a 2015 dynamic panel analysis ac oss mul iple
A ican coun ies, which iden i ies signi ican coin eg a ion ela ionships and e o -co ec ion
dynamics, sugges ing ha de ia ions in esou ce dependence and income le els adjus owa d
long- un s eady s a es. Such indings con as wi h s udies like Ka oka & Dos al (2022), which
u ilize h eshold eg essions o accoun o nonlinea i ies in commodi y-p ice channels,
e ealing ha he impac o esou ce income on g ow h a ies depending on p ice egimes.
A g owing body o esea ch examines he esou ce cu se pa adox using mul i-me hod
compa isons. B unnschweile -Bul e-s yle me a-analyses (2016–2022) epo mixed esul s:
app oxima ely 40 % o s udies ind ad e se g ow h e ec s, 40 % no signi ican e ec s, and
20 % posi i e e ec s, la gely depending on con ex , model, and p oxy used. Newe empi ical
con ibu ions echo his he e ogenei y. Fo example, a 2024 s udy u ilizing da a om 46 SSA
na ions (2000–2022) applies sys em GMM and con i ms ha while na u al esou ce en s
gene ally s imula e GDP, he e ec diminishes o e e ses a highe le els o dependence.
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Se e al s udies en ich he analysis by con olling o ins i u ional quali y and en i onmen al
ou comes. An MDPI (2023) in es iga ion links na u al esou ce income, ins i u ional a iables,
and en i onmen al deg ada ion, epo ing ha esou ce en s inc ease emissions bu ha
s onge ins i u ions a enua e his e ec when using GMM es ima ions. Simila ly, esea ch
in o wood- uel economies (2019) shows how esou ce use in e plays wi h g ow h and ca bon
impac s ac oss SSA using mac o-panel GMM, while c oss-sec o panel VARs (2021) e eal
ha g ow h e ec s a e con ingen upon ade openness and ins i u ional quali y.
Th eshold models and he e ogenei y-awa e app oaches u he nuance he analysis. A 2022
h eshold- egime s udy iden i ies dis inc egimes in he FDI– esou ce–g ow h ela ionship,
indica ing ha FDI’s g ow h-enhancing e ec is media ed by he le el o esou ce dependence.
Concu en ly, panel he e ogenei y amewo ks (e.g., Pesa an e al., 2019; Aghion & Howi ,
2021) unde sco e he impo ance o accoun ing o c oss-sec ional dependencies and pa ame e
he e ogenei y in dynamic panels.
Local-le el s udies also con ibu e aluable mic o-empi ical insigh s. P o enzano & Bull
(2021), using sa elli e-da a and di e ence-in-di e ence, epo ha while mining boos s local
u baniza ion, hese gains a e empo a y and hea ily condi ioned by poli ical egimes, echoing
he b oade dynamic and con ingen na u e o esou ce-led g ow h.
2.3. Hypo heses De elopmen
H₁: Na u al esou ce dependence nega i ely a ec s economic g ow h ( esou ce cu se)
The nega i e ela ionship be ween na u al esou ce dependence and economic g ow h is widely
heo ized h ough mechanisms like Du ch disease, en -seeking, and ola ili y. Sachs and
Wa ne (2001) documen ed ha high na u al esou ce eliance ends o c owd ou
manu ac u ing, gene a ing ne nega i e g ow h e ec s. Van de Ploeg (2011) u he explica ed
he mac oeconomic and ins i u ional pa hways ha may in e expec ed g ow h bene i s om
esou ce weal h. Me a-analy ical e iews (Badeeb, Lean, & Cla k, 2017) poin o pe sis en
nega i e associa ions, pa icula ly in dynamic panels, ein o cing he esou ce cu se
hypo hesis.
Empi ical e idence employing GMM and coin eg a ion echniques in SSA suppo s his
nega i e dynamic. S udies ha e documen ed ha esou ce en dependence shi s p oduc i e
ac i i y away om highe - alue sec o s (Acos a e al., 2022) esul ing in slowe g ow h. Fo
ins ance, ecen panel-dynamic GMM es ima ions (Epo & Faha, 2020; Asiamah e al., 2022)
e eal consis en nega i e coe icien s o esou ce en s on GDP pe capi a g ow h. A 2022
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mul i-coun y analysis using dynamic GMM also ound ha egions hea ily elian on uel and
mine al expo s ace cons ained g ow h ajec o ies (Na u al Resou ce Dependence and
Ins i u ional Quali y, 2022). This con e gence ac oss me hodologies and ime ames
unde sco es he obus ness o he ad e se g ow h e ec associa ed wi h esou ce dependence
in SSA economies.
H₂: Ins i u ional quali y mi iga es he nega i e impac o esou ce dependence on economic
g ow h
Theo e ical amewo ks (Mehlum, Moene, & To ik, 2006; Acemoglu & Robinson, 2012)
posi ha ins i u ions de e mine whe he esou ce abundance becomes a blessing o cu se.
Be e go e nance, p ope y igh s, and egula o y amewo ks a e heo ized o channel
e enues in o p oduc i e in es men , p e en ing en -seeking and Du ch disease e ec s. Recen
heo y goes u he by di e en ia ing ins i u ional componen s such as ule o law,
accoun abili y, and egula o y quali y, each o e ing nuanced mi iga ion po en ial (To ik,
2017).
A g owing empi ical li e a u e suppo s he mode a ing ole o ins i u ions in SSA. Sys em
GMM es ima ions (Asiamah e al., 2022; Sibanda e al., 2023) e eal ha esou ce en s
nega i ely a ec g ow h p ima ily whe e go e nance is weake . In con as , in high-ins i u ion
egimes, he ad e se coe icien is a enua ed o becomes insigni ican . A ecen IV-GMM
s udy on p ope y igh s ac oss A ican oil economies (2024) shows ha imp o ed p ope y
ins i u ions can con e esou ce cu se dynamics in o g ow h a enues. Likewise, a 2025 c oss-
coun y examina ion con i med ha mac o-ins i u ion indica o s such as egula o y quali y and
con ol o co up ion signi ican ly educe esou ce-dependence d ag on g ow h (Does
Go e nance Ma e …, 2025).
H₃: In es men , ade openness, and labo o ce pa icipa ion posi i ely in luence economic
g ow h, pa icula ly in conjunc ion wi h sound go e nance
Key elemen s o neoclassical g ow h heo y-capi al accumula ion, human capi al, ade—a e
widely held o be g ow h-enhancing. Be g e al. (2012) s essed capi al o ma ion as c i ical in
capi al-sca ce SSA coun ies. T ade openness is heo ized o boos g ow h by acili a ing
echnology ans e , specializa ion, and e iciency (F ankel & Rome , 1999). Labo o ce
pa icipa ion ensu es he p oduc i e use o human capi al, while sound go e nance is a gued
o ampli y hese syne gies (Dolla & K aay, 2003).
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Recen empi ical assessmen s con i m hese heo e ical claims wi hin SSA. Dynamic GMM
s udies ind ha g oss capi al o ma ion exe s s ong posi i e, and s a is ically signi ican
g ow h e ec s (Namaho o, Wu, & Su, 2023; G een G ow h Dynamics, 2025). T ade openness
con ibu es posi i ely in panel se ings, pa icula ly unde obus go e nance egimes (Emilie
Kin ack & Bonga-Bonga, 2023; T ade Openness, Ins i u ions, and Inclusi e G ow h, 2022).
Labo pa icipa ion also shows signi ican albei smalle e ec s, consis en wi h demog aphic-
economic models (Ta e , 2021; Kouassi e al., 2022). Addi ionally, hyb id s udies combining
ade and inancial openness emphasize ha s ong go e nance enhances he g ow h impac o
bo h capi al in lows and ade in eg a ion (Fankem & Ouma ou, 2020), highligh ing he pi o al
ole o go e nance quali y in le e aging g ow h de e minan s.
3. Me hodology
The ela ionship be ween na u al esou ce dependence and economic g ow h in Sub-Saha an
A ica can be unde s ood h ough se e al in e ela ed heo e ical pe spec i es, each o e ing
insigh s in o di e en mechanisms a play. Classical and neoclassical g ow h models p o ide
he ounda ional s uc u e, while ins i u ional and poli ical economic heo ies elucida e how
esou ce dependence may condi ion g ow h ou comes.
The neoclassical Solow-Swan g ow h model (Solow, 1956) se es as a s a ing poin o
concep ualising long- un g ow h dynamics. In i s basic o m, ou pu 𝑌 is p oduced using capi al
𝐾, labou 𝐿, and a echnology ac o 𝐴. The agg ega e p oduc ion unc ion is gi en by:
𝑌(𝑡) = 𝐴(𝑡)𝐾(𝑡)𝛼𝐿(𝑡)1−𝛼 (1)
whe e 0 < 𝛼 < 1 e lec s he elas ici y o ou pu wi h espec o capi al. In his amewo k,
long- un pe capi a g ow h is d i en by echnological p og ess, whe eas ac o accumula ion
exhibi s diminishing e u ns. Na u al esou ce weal h, i ea ed as an exogenous income
sou ce, may ini ially boos capi al accumula ion bu canno sus ain long- un g ow h unless
ein es ed in p oduc i i y-enhancing ac i i ies (Sachs & Wa ne , 2001).
Ex ending his model o explici ly inco po a e na u al esou ces, many schola s adop an
augmen ed p oduc ion unc ion ha includes esou ce en s 𝑅 as an inpu (B unnschweile &
Bul e, 2008; an de Ploeg & Poelhekke, 2017). This yields he ollowing o m:
𝑌(𝑡) = 𝐴(𝑡)𝐾(𝑡)𝛼𝐿(𝑡)𝛽𝑅(𝑡)𝛾 (2)
whe e 𝛾 ep esen s he elas ici y o ou pu wi h espec o na u al esou ces. While such a
o mula ion allows esou ces o con ibu e di ec ly o ou pu , i also highligh s po en ial pi alls.
Excessi e eliance on esou ce en s may dis o incen i es and os e a en -seeking economy
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(Mehlum, Moene, & To ik, 2006). Mo eo e , esou ce wind alls o en lead o app ecia ion o
he eal exchange a e, educing compe i i eness in adable sec o s, a phenomenon known as
Du ch Disease (Co den & Nea y, 1982). In ma hema ical e ms, an inc ease in esou ce
e enues 𝑅 can be linked o an app ecia ion o he eal exchange a e 𝑞 h ough:
Δ𝑞 = 𝜙Δ𝑅 (3)
whe e 𝜙 > 0 cap u es he sensi i i y o he exchange a e o esou ce in lows. As 𝑞 app ecia es,
manu ac u ing and ag icul u al expo s may con ac , impeding s uc u al ans o ma ion and
long- e m g ow h (Ha ding & Venables, 2013).
Ano he heo e ical s eam emphasises he ole o ins i u ions in media ing he esou ce-g ow h
ela ionship. Acco ding o he ins i u ional esou ce cu se hypo hesis (Acemoglu & Robinson,
2012), esou ce en s p o ide oppo uni ies o eli e cap u e and weaken public accoun abili y.
This dynamic can be o malised in a poli ical economy model whe e he p obabili y 𝜋 o en
cap u e by eli es is an inc easing unc ion o esou ce weal h 𝑅 and a dec easing unc ion o
ins i u ional quali y 𝜃:
𝜋 = 𝑓(𝑅, 𝜃), ∂𝜋
∂𝑅 > 0, ∂𝜋
∂𝜃 < 0 (4)
Highe 𝜋 is associa ed wi h subop imal public in es men and co up ion, bo h o which impai
economic pe o mance (Collie & Gode is, 2012). The e o e, he g ow h e ec s o esou ce
weal h a e no uni o m bu con ingen on ins i u ional se ings.
Dynamic empi ical g ow h models inco po a ing hese heo e ical insigh s o en adop panel
da a speci ica ions ha accoun o bo h sho - un dynamics and long- un equilib ium
ela ionships. A ypical dynamic panel model used in empi ical analyses o he esou ce-g ow h
nexus akes he ollowing o m (A ellano & Bond, 1991; Blundell & Bond, 1998):
Δ𝑦𝑖𝑡 = 𝛼Δ𝑦𝑖𝑡−1 + 𝛽Δ𝑋𝑖𝑡 + 𝜇𝑖+ 𝜀𝑖𝑡 (5)
whe e 𝑦𝑖𝑡 is he log o GDP pe capi a o coun y 𝑖 a ime 𝑡, 𝑋𝑖𝑡 is a ec o o explana o y
a iables including na u al esou ce dependence and ins i u ional quali y, 𝜇𝑖 cap u es
unobse ed coun y-speci ic e ec s, and 𝜀𝑖𝑡 is he idiosync a ic e o e m. The Gene alised
Me hod o Momen s (GMM) es ima o is ypically employed o add ess endogenei y conce ns
a ising om he co ela ion be ween 𝑦𝑖𝑡−1 and 𝜇𝑖 (Roodman, 2009).
Impo an ly, he ela ionship be ween na u al esou ces and g ow h may exhibi nonlinea i ies.
Some s udies sugges ha a low le els o dependence, esou ces can os e g ow h h ough
capi al accumula ion and in as uc u e de elopmen , bu beyond a h eshold, ad e se
ins i u ional and mac oeconomic e ec s domina e (Papy akis & Ge lagh, 2004). A quad a ic
e m in esou ce dependence 𝑅𝑖𝑡 is hus o en included:
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Va iable
NRR Model
FUEX Model
MINEX Model
Hansen J (p- alue)
0.287
0.312
0.301
A ellano-Bond AR(2) (p)
0.421
0.398
0.410
Sou ce: Au ho (2025)
Table 7: Pos -Es ima ion Tes s
Tes
S a is ic
p- alue
Hansen J es (o e id.)
19.427
0.287
AR(1) es
-2.792
0.005
Sou ce: Au ho (2025)
Table 8: Robus ness Check (Subsample by Ins i u ional Quali y)
Va iable
Low INST
High INST
Na u al Resou ce Ren s
-0.145***
-0.045
Ins i u ional Quali y
0.120
0.410***
Lagged GDPPC G ow h
0.204***
0.221***
G oss Capi al Fo ma ion
0.072**
0.097***
T ade Openness
0.005
0.022**
No e: Signi icance codes: *** p<0.01, ** p<0.05, * p<0.1
Sou ce: Au ho (2025)
In e na ional Jou nal o Social and Educa ional Inno a ion (IJSEI o)
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No e: Figu e 1 - Residual s i ed alue;
Figu e 2 - P edic ed s Ac ual GDP G ow h;
Figu e 3 - Dynamic e ec o Lagged GDP g ow h o e ime
Sou ce: Au ho (2025)
4.2 Hypo heses E alua ion and Policy Implica ions
H₁: Na u al esou ce dependence nega i ely a ec s economic g ow h ( esou ce cu se).
This hypo hesis is s ongly con i med by he analysis. The signi ican nega i e coe icien s
subs an ia e ha highe na u al esou ce dependence is associa ed wi h lowe GDP pe capi a
g ow h. These indings a e consis en wi h he esou ce cu se heo y a icula ed by Sachs and
Wa ne (2001) and ex ended by an de Ploeg (2011). They also align wi h me a-analy ical
e idence p esen ed by Badeeb e al. (2017) and dynamic panel s udies in he SSA con ex ,
which documen pe sis en ad e se g ow h e ec s linked o esou ce dependence (Epo & Faha,
2020)
H₂: Ins i u ional quali y mi iga es he nega i e impac o esou ce dependence on g ow h.
This hypo hesis is suppo ed. The obus ness check demons a es ha in coun ies wi h highe
ins i u ional quali y, he nega i e associa ion be ween esou ce dependence and g ow h is
signi ican ly educed and loses s a is ical signi icance. This esul is in line wi h he
ins i u ionalis iew ha e ec i e go e nance can o se he de imen al e ec s o esou ce
dependence (Acemoglu & Robinson, 2012). Recen empi ical analyses o SSA (Asiamah e
al., 2022; Gelb e al., 2023) show ha ins i u ional quali y plays a pi o al mode a ing ole,
alida ing he hypo hesis.
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H₃: In es men , ade openness, and labo o ce pa icipa ion posi i ely in luence economic
g ow h, pa icula ly in conjunc ion wi h sound go e nance.
This hypo hesis is alida ed. The posi i e and s a is ically signi ican coe icien s o g oss
capi al o ma ion (GCF) and ade openness (TRADE) suppo he heo e ical p oposi ions ha
capi al accumula ion and economic in eg a ion enhance g ow h (Calde ón & Se én, 2010;
F ankel & Rome , 1999). Al hough he coe icien o labo pa icipa ion (LAB) is smalle and
ma ginally signi ican , i s posi i e sign is consis en wi h demog aphic-economic g ow h
heo ies (Hanushek & Woessmann, 2015), which emphasize he con ibu ion o an ac i e labo
o ce o long- un economic pe o mance.
The e idence p esen ed ca ies p o ound policy signi icance. Fi s , he consis en esou ce
cu se e ec calls o imp o ed go e nance o p e en en cap u e, eal exchange a e
misalignmen , and economic s agna ion. Policy e o s should p io i ize anspa ency,
independence o ins i u ions, and quali y o legal sys ems (Mehlum e al., 2006; Asiamah e
al., 2022).
Second, capi al o ma ion exhibi s obus posi i e impac s, sugges ing go e nmen s should
bols e physical and human capi al in es men . In as uc u e, educa ion, and echnology
adop ion a e essen ial o sus ain p oduc i i y and bu e esou ce dependence.
Thi d, ade openness is bene icial al hough mild; ailo ed ade policies can help domes ic
indus ies upg ade while main aining exposu e o global ma ke s (Rod ik, 2001; Asongu &
Odhiambo, 2023).
Fou h, he mode a ing e ec o ins i u ions unde sco es he need o g adua ed e o m: policy
e o s should i s s eng hen ins i u ions, e en modes imp o emen s can educe he esou ce
cu se’s nega i e impac ( an de Ploeg & Poelhekke, 2017). This mul i ace ed app oach aligns
wi h in eg a ed esou ce managemen amewo ks ad oca ed by Sachs & Wa ne (2001) and
Humph eys e al. (2007).
5. Conclusion
This s udy has examined he in ica e ela ionship be ween na u al esou ce dependence,
ins i u ional quali y, and economic g ow h in Sub-Saha an A ica. The s udy ein o ces he
pi o al ole o ins i u ions in shaping economic ou comes. Th ough sus ained go e nance
e o ms, s a egic in es men , and egional in eg a ion, SSA coun ies can ha ness hei
esou ce weal h o os e inclusi e and esilien g ow h. Ad ancing his agenda equi es
con inued schola ly a en ion and a deepened commi men o e idence-based policymaking.
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The esul s p o ide obus e idence o a pe sis en esou ce cu se ac oss he egion: highe
dependence on na u al esou ce en s exe s a signi ican nega i e e ec on GDP pe capi a
g ow h. The e ec is no ine i able, i s se e i y diminishes in he p esence o s ong
ins i u ional quali y, unde sco ing he c i ical ole o go e nance. Addi ionally, capi al
o ma ion, ade openness, and, o a lesse ex en , labo o ce pa icipa ion eme ged as
signi ican posi i e d i e s o g ow h. These indings a e consis en wi h con empo a y
esou ce cu se li e a u e (A ezki e al., 2021; Gelb e al., 2023) and ins i u ional g ow h heo ies
(Acemoglu & Robinson, 2012).
While his s udy p o ides impo an insigh s, se e al limi a ions mus be acknowledged. Fi s ,
al hough he use o Sys em GMM add esses endogenei y conce ns, he po en ial o unobse ed
he e ogenei y emains (Roodman, 2009). Second, he eliance on agg ega e coun y-le el da a
may mask subna ional dispa i ies in esou ce go e nance and g ow h ou comes (Cus &
Poelhekke, 2015). Thi d, he ope a ionaliza ion o ins i u ional quali y using b oad composi e
indica o s, hough s anda d in c oss-coun y s udies, may no ully e lec ins i u ional nuances
in SSA con ex s (Gelb e al., 2023). Finally, while his s udy ocused on linea e ec s, mo e
complex non-linea o h eshold ela ionships be ween esou ces, ins i u ions, and g ow h
could exis , wa an ing u he explo a ion.
Se e al ac ionable ecommenda ions a ise. Policymake s in SSA should p io i ize ins i u ional
e o ms aimed a enhancing anspa ency, ule o law, and public accoun abili y. Es ablishing
so e eign weal h unds wi h clea go e nance s uc u es and adop ing iscal ules can help
s abilize esou ce e enues and mi iga e p ocyclicali y (Bo a e al., 2016). Mo eo e , os e ing
economic di e si ica ion h ough a ge ed suppo o non- esou ce sec o s is c ucial o
educing ulne abili y o commodi y p ice shocks (Gelb e al., 2023). In es men s in human
capi al should complemen physical capi al in es men s o enhance labo p oduc i i y and
long- e m g ow h p ospec s (Hanushek & Woessmann, 2015). A he egional le el, deepening
ade in eg a ion unde amewo ks like he A ican Con inen al F ee T ade A ea (A CFTA)
o e s a enues o expanding ma ke access and s imula ing s uc u al ans o ma ion (Asongu
& Odhiambo, 2023).
Fu u e esea ch should add ess he limi a ions highligh ed. Fi s , mo e g anula analyses
inco po a ing subna ional da a could yield iche insigh s in o he local dynamics o esou ce
go e nance and economic pe o mance (Cus & Poelhekke, 2015). Second, u u e s udies
should explo e in e ac ion e ec s be ween esou ce dependence, go e nance quali y, and o he
s uc u al ac o s such as inancial de elopmen o human capi al (Mehlum e al., 2006). Thi d,
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he applica ion o machine lea ning echniques o iden i y non-linea pa e ns o s uc u al
b eaks in he esou ce-g ow h ela ionship ep esen s a p omising a enue. Finally, longi udinal
case s udies o SSA coun ies ha ha e success ully escaped he esou ce cu se could p o ide
aluable lessons o he egion (Gelb e al., 2023).
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