Natural resource dependence and human capital accumulation – an analysis for selected Saarc, Asean and Opec countries

Abstract

Natural Resource Dependence has been identified as a factor contributing to the paradoxical ‘’natural resource curse’’ hypothesis. This study attempts to identify the effect of Natural Resource dependence in SAARC, ASEAN and OPEC groups; in other words, is it a curse or a blessing for each region particularly in terms of the impact of Natural Resource dependence on human capital accumulation in each group. A political economy model is employed to carry out the analysis. The empirical results reveal that natural resource dependence is in fact a blessing for the SAARC region, a curse for the OPEC region and it could be a blessing or a curse for the ASEAN region depending on the measure of natural resources used. The results also exhibit that when a panel data technique is employed the role of institutional quality in determining the relationship between natural resources and human capital blurs.