Debt overhang and natural resources: revisiting the resource curse hypothesis

Jones, Yakama Manty (2014) Debt overhang and natural resources: revisiting the resource curse hypothesis. PhD thesis, Birkbeck, University of London.

[img]
Preview
PDF
yakama manty jones thesis.pdf - Full Version

Download (5MB) | Preview

Abstract

Growth literature presents evidence that resource abundant economies comparatively grow less than other economies, giving rise to the ‘Resource Curse Hypothesis’. Many researchers have developed several theories to explain the ‘Resource Curse’ but there are very few explicit considerations of ‘Debt Overhang’ in these explanations. This study concentrates on the ‘Debt Overhang –Resource Curse’ link given the significant relationships between debt sustainability and other resource spending. It also implicitly seeks to test key competing theories. The key contribution is the evaluation of the ‘Resource Curse’ and ‘Debt Overhang’ phenomena simultaneously using mixed methods analysis. This thesis consist of three complementary empirical studies organised in chapters under the ‘Debt Overhang-Resource Curse’ theme: A Panel Data Analysis of Debt Overhang, Natural Resources and Growth in 153 countries from 1970 to 2011; A Time Series Analysis of Sierra Leone’s Debt Overhang, Natural Resource and Growth Experience from 1970 to 2011 and A Perceptions and Documentary Analysis of Debt Overhang, Natural Resources and Growth in Sierra Leone. In Chapter Three, the ‘Debt Overhang –Resource Curse’ hypothesis was tested by estimating a system of simultaneous equations using the Generalised Method of Moments Three - Staged Least Squares estimator for the whole panel and carefully defined subsets. The results confirmed the ‘Debt Overhang –Resource Curse’ hypothesis in the case of least developed countries, mineral rich countries and petroleum rich countries although it failed to excel when the whole panel was examined. The ‘Debt Overhang –Resource Curse’ hypothesis was also confirmed in Chapter Four, when a Structural Vector Autoregressive Model was estimated for Sierra Leone : a resource rich, heavily indebted poor country at the bottom of the Human Development Index, has recently received large economic growth projections. The results for Sierra Leone were further confirmed using cointegration and Granger causality tests. The investigation continued with a perceptions and documentary analysis in Chapter Five. It investigated whether perceptions of Sierra Leoneans provide support for the Debt Overhang –Resource Curse hypothesis by estimating a structural equation model using Partial Least Squares, utilising data collected during a survey of mining communities. The results of the estimations were triangulated with findings from interviews, observations and documentary analysis. This analysis provided support for the hypothesis as well as some complementary theories within the Resource Curse debate. This simultaneous assessment of the impact of both debt overhang and natural resources on growth went beyond quantitative investigations to provide proof of the link shared by these elements. It also made a rationale for a ‘case-by-case’ analysis of economic growth and development phenomena, resulting in policy recommendations with a greater degree of alignment.

Item Type: Thesis (PhD)
Copyright Holders: The copyright of this thesis rests with the author, who asserts his/her right to be known as such according to the Copyright Designs and Patents Act 1988. No dealing with the thesis contrary to the copyright or moral rights of the author is permitted.
School/Department: School of Business, Economics & Informatics > Management
Depositing User: ORBIT Editor
Date Deposited: 29 Oct 2014 09:40
Last Modified: 02 Dec 2016 12:47
URI: http://bbktheses.da.ulcc.ac.uk/id/eprint/95

Actions (ORBIT staff only)
View Item View Item