Natural resources, education, and economic development

Human Capital, Industrial Growth and Resource Curse

“…The importance of human capital for development of resource rich countries is emphasized in a number of theoretical and empirical papers (Gylfason, 2001;Stijns, J. P., 2001;BravoOrtega and de Gregorio, 2005). Some authors evaluate the role of human capital as the most important factor which accumulation will allow resource abundant country to overcome the problems with underdevelopment and, on the contrary, which under accumulation will prevent countries from industrial diversification (Leamer et al, 1999).…”

“…The spectrum of issues raised in the literature ranges from the issues of currency appreciation in the era of high resource prices and the subsequent "Dutch disease" effects that deteriorate the development of industrial sector of the economy (Corden and Neary, 1984;Sachs and Warner, 1995) to the political economy problems associated with the numerous nonproductive activities of economic agents provoked by the huge natural resource rents that undermine the institutional development of the economy and slow down economic development (Lane and Tornell, 1999;Auty, 2001) One of the channels that the literature addresses deals with the link between human capital development and natural resource abundance (Leamer et al, 1999;Gylfason 2001). The argument is based on the idea that resource intensive sectors absorb national savings while creating only a few eminently qualified jobs which leads to lower incentive of the society to educate their citizens compare to the societies with lower abundance in natural resources.…”

“…While in the world on average 64% of kids have access to secondary education this figure is 57% for OPEC countries. While world average spending on education is around 5% of the GNP, OPEC countries on average spend less than 4% (figures for 1997 from Gylfason (2001)). …”

Environmental Resources Depletion and Interplay Between Negative and Positive Externalities in a Growth Model

“…(pp. 18-19) Many recent works have focused on exposing several mechanisms through which the scarcity of resources may stimulate growth processes; some of the most interesting are those of Rauch (1989( ), Matsuyama (1992, Sachs and Warner (1995, Rodriguez and Sachs (1999), Auty (2001), Gylfason (2001). A review of the various studies on this matter is not contemplated by the present article [for a brief review, please refer to Auty (2001), Gylfason (2001, Sachs and Warner (2001)]; however, to sum them up, the most important explanations can be classified as follows: 1) Some authors have concentrated on exposing the channels by means of which the abundance of resources can affect the motivation and the efficiency of public administrators in implementing virtuous behaviours that are typically growth-inducing; that is to say, that characterize a "developmental state" [see e.g., Auty (1997Auty ( , 2001, Gelb (1998)].…”

“…In Gylfason, Herbertsson and Zoega (1999) e in Gylfason (2001), the crowded-out sector x is education: "…….nations that are confident that their natural resources are their most important asset may inadvertently -and perhaps even deliberately!-neglect the development of their human resources, by devoting inadequate attention and expenditure to education. Their natural wealth may blind them to the need for educating their children."…”