The effect of natural resource dependence on industrialization in Africa: The role of institutional quality
摘要
This article analyzes the role of institutional quality in the effect of natural resources on industrialization in Africa. Two industrialization indicators are considered: Manufacturing value added as a percentage of GDP and manufacturing value added per capita. An Autoregressive Distributed Lag model and the Pooled Mean Group (PMG) method are used on a sample of 27 African countries whose natural resource exports represent, on average, at least 15% of their exports over the period 2000–2021.The results indicate that total resource rents have a negative and significant influence on industrialization in Africa. Furthermore, the interactions between natural resource rents and indicators such as government effectiveness and the rule of law all contributed significantly to increasing the level of industrialization in Africa, with policy action thresholds. Thus, these results underline the need to strengthen government efficiency and consolidate the rule of law so that the exploitation of natural resources can stimulate industrialization in Africa.