Resource Curse in WAIFEM Member Countries: An Application of Seemingly Unrelated Regression

Abstract

Even though empirical evidence has shown that naturally endowed countries growth slower than their less naturally endowed counterparts, the scenario tagged as “resource curse hypothesis”, but it seems there are exceptions. Therefore, this study examines the confirmation or disputation of resource curse hypothesis among the West African Institutes for Financial and Economic Management (WAIFEM) member countries during the period 1986-2016. The study applied seemingly unrelated regression (SUR) and unraveled the strengthened effect of natural resources on output growth in Gambia, Ghana, and Sierra Leone. But, the study revealed a negative and statistically significant effect on economic growth in Liberia and Nigeria, thereby upholding the presence of resource curse hypothesis only in Liberia and Nigeria. Therefore, an overall “umbrella” policy recommendation inappropriate, but individually designed strategy that would help in managing the resources rents effectively in order to boost economic growth particularly in Liberia and Nigeria where their resource endowment serve as a curse rather than a blessing is recommended.

Received: 27 October 2022 | Revised: 8 March 2023 | Accepted: 13 March 2023

Conflicts of Interest

The authors declare that they have no conflicts of interest to this work.