The “resource curse” phenomenon has been the subject of extensive research, with its causes and transmission mechanisms primarily examined from the perspectives of economic development and rent seeking. Education is a major factor contributing to economically sustainable development, owing to its potential for improving cognition and skill levels and thereby enhancing worker productivity. The crowding-out or crowding-in effect of natural resource dependence on public education spending has been identified as one of the key mechanisms of the resource curse or blessing. Using panel data from 31 Chinese provinces, this empirical study revealed a positive correlation between natural resource dependence and public education expenditure, demonstrating the impact of the crowding-in effect, exerted by natural resource dependence, on public education expenditure. Abundant natural resources can provide funds for education expenditure. The sample was further divided into eastern and central and western regions. The results indicate that the crowding-out effect of natural resource dependence only affects public education expenditure in the Eastern region, while the crowding-in effect of natural resource dependence on public education expenditure in the central and western regions. Research shows that the regional differences of crowding-out or crowding-in effect are very obvious, so the government should adopt transfer payment to promote balanced regional development. Better economic and social policies will help to translate wealth from natural resources into economic growth. Thus, a “resource blessing” may emerge to replace the “resource curse.” Fairly distributed and higher quality education will enhance human capital, thereby promoting economic growth from its current resource-driven pattern to a knowledge-driven pattern.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
This is counterintuitive: generally, the East is better developed. Eastern provinces should pay greater attention to, and invest more in, education. We propose two possible explanations for this counterintuitive phenomenon: first, GDP is higher in the East. As a result, the ratio of education investment to GDP is not high enough. However, it does not necessarily follow that the absolute value of education investment is low. Second, in recent years, China has adopted development strategies such as “The Grand Western Development Program“ and “The Rise of Central China.” These policies are aimed at enhancing public transfer to Central and Western regions, leading to increased investment in education in these regions.
Aghion P, Howitt P (1998) Endogenous growth theory. MIT Press, Cambridge
Ahmed K, Mahalik MK, Shahbaz M (2016) Dynamics between economic growth, labor, capital and natural resource abundance in Iran: an application of the combined cointegration approach. Res Policy 49:213–221
Alexeev M, Conrad R (2009) The elusive curse of oil. Rev Econ Stat 91(3):586–598
Anne DB, Jan P, Jesper R (2007) Resource curse or not: a question of appropriability, the. Scand J Econ 109(3):593–617
Apergis N, Payne JE (2014) The oil curse, institutional quality, and growth in MENA countries: evidence from time-varying cointegration. Energy Econ 46:1–9
Auty RM (1990) Resource-based industrialization: sowing the oil in eight developing countries. Oxford University Press, New York
Auty RM (1993) Sustaining development in mineral economies: the resource curse thesis. Routledge, London
Auty RM (2003) Natural resources, development models and sustainable development. Environmental Economics Programme Discussion Paper 03–01. International Institute for Environment and Development (IIED), London
Auty RM (2007) Natural resources, capital accumulation and the resource curse. Ecol Econ 61(4):627–634
Badeeb RA, Lean HH, Smyth R (2016) Oil curse and finance–growth nexus in Malaysia: the role of investment. Energy Econ 57:154–165
Badeeb RA, Lean HH, Clark J (2017) The evolution of the natural resource curse thesis: a critical literature survey. Res Policy 51:123–134
Ben-Salha O, Dachraoui H, Sebri M (2018) Natural resource rents and economic growth in the top resource-abundant countries: a PMG estimation. Res Policy. https://doi.org/10.1016/j.resourpol.2018.07.005
Birdsall N, Pinckney T, Sabot R (2000) Natural resources, human capital, and growth. Carnegie Endowment Working Papers, http://carnegieendowment.org/files/natresources.pdf. Accessed 29 Oct 2018.
Blanco L, Grier R (2012) Natural resource dependence and the accumulation of physical and human capital in Latin America. Res Policy 37(3):281–295
Boschini A, Pettersson J, Roine J (2013) The resource curse and its potential reversal. World Dev 43:19–41
Cockx L, Francken N (2016) Natural resources: a curse on education spending? Energy Policy 92:394–408
Dauvin M, Guerreiro D (2017) The paradox of plenty: a meta-analysis. World Dev 94:212–231
Dissou Y, Didic S, Yakautsava T (2016) Government spending on education, human capital accumulation, and growth. Econ Model 58:9–21
Douangngeune B, Hayami Y, Godo Y (2005) Education and natural resources in economic development: Thailand compared with Japan and Korea. J Asian Econ 16(2):179–204
Gilberthorpe E, Papyrakis E (2015) The extractive industries and development: the resource curse at the micro, meso and macro levels. Extr Ind Soc 2(2):381–390
Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377
Gylfason T (2001) Natural resources, education, and economic development. Eur Econ Rev 45(4–6):847–859
Hamdi H, Sbia R (2013a) The relationship between natural resources rents, trade openness and economic growth in Algeria. Econ Bull 33:1649–1659
Hamdi H, Sbia R (2013b) Dynamic relationships between oil revenues, government spending and economic growth in an oil dependent economy. Econ Model 35:118–125
Han HY, Zhang ZJ (2015) “Resource curse” transmission mechanism: an empirical analysis based on provincial data. Journal of Arid Land Resources and Environment 29(7):1–6
Havranek T, Horvathb R, Zeynalov A (2016) Natural resources and economic growth: a meta-analysis. World Dev 88:134–151
Hu YC, Xiao DY (2007) The threshold of economic growth and the natural resource curse. Management World 4:15–23
James A (2015) The resource curse: a statistical mirage? J Dev Econ 114:55–63
James A (2017) Natural resources and education outcomes in the United States. Resour Energy Econ 49:150–164
James A, Aadland D (2011) The curse of natural resources: an empirical investigation of U.S. counties. Resour Energy Econ 33(2):440–453
Koitsiwe K, Adachi T (2015) Relationship between mining revenue, government consumption, exchange rate and economic growth in Botswana. Contad Y Adm 60: 133–148.
Law SH, Moradbeigi M (2017) Financial development and oil resource abundance–growth relations: evidence from panel data. Environ Sci Pollut Res 24:22458–22475
Long XL, Chen YQ, Du JG, Oh KY, Han IS (2017) Environmental innovation and its impact on economic and environmental performance: evidence from Korean-owned firms in China. Energy Policy 107:131–137
Long XL, Luo YS, Sun HP, Tian G (2018) Fertilizer using intensity and environmental efficiency for China’s agriculture sector from 1997 to 2014. Nat Hazards 92(3):1573–1591
Mehlum H, Moene K, Torvik R (2006) Institutions and the resource curse. Econ J 116(508):1–20
Mensah CN, Long X, Boamah KB, Bediako IA, Dauda L (2018) The effect of innovation on CO2 emissions of OCED countries from 1990 to 2014. Environ Sci Pollut Res 25:29678–29698
Michaels G (2011) The long term consequences of resource-based specialization. Econ J 121(551):31–57
Moradbeigi M, Law SH (2017) The role of financial development in the oil-growth nexus. Res Policy 53:164–172
Neumayer E (2004) Does the “resource curse” hold for growth in genuine income as well? World Dev 32:1627–1640
Ojakorotu V (2017) Resource control and conflict in Africa. In: Oloruntoba SO, Falola T (eds) The Palgrave Handbook of African Politics, Governance and Development. Palgrave Macmillan, New York, pp 367–385
Papyrakis E, Gerlagh R (2007) Resource abundance and economic growth in the United States. Eur Econ Rev 51(4):1011–1039
Qian XY, MIU RY, HU BW (2014) The human capital accumulation efficiency of educational input: a study based on the stochastic frontier educational production function model. Chinese Journal of Population Science 2:74–83
Ross ML (2015) What have we learned about the resource curse? Annu Rev Polit Sci 18:239–259
Sachs JD (2007) How to handle the macroeconomics of oil wealth. In: Humphreys M, Sachs JD, Stiglitz JE (eds) Escaping the resource curse. Columbia University Press, New York, pp 173–193
Sachs JD, Warner AM (2001) Natural resources and economic development: the curse of natural resources. Eur Econ Rev, 45(4–6):827–838.
Satti SL, Farooq A, Loganathan N, Shahbaz M (2014) Empirical evidence on the resource curse hypothesis in oil abundant economy. Econ Model 42:421–429
Shahbaz M, Naeem M, Ahad M, Tahir I (2018) Is natural resource abundance a stimulus for financial development in the USA? Resour. Policy 55:223–232
Shao S, Qi ZY (2009) Energy exploitation and economic growth in western China: an empirical analysis based on the resource curse hypothesis. Frontiers of Economics in China 4(1):125–152
Shao S, Yang LL (2014) Natural resource dependence, human capital accumulation, and economic growth: a combined explanation for the resource curse and the resource blessing. Energy Policy 74(33):632–642
Shao S, Fan MT, Yang LL (2013) How does resource industry dependence affect economic development efficiency? Management World 2:32–63
Shao S, Liu JH, Geng Y, Miao Z, Yang YC (2016) Uncovering driving factors of carbon emissions from China’s mining sector. Appl Energy 166:220–238
Shao S, Tian ZH, Fan MT (2018) Do the rich have stronger willingness to pay for environmental protection? New evidence from a survey in China. World Dev 105:83–94
Song ML, Wang JL, Zhao JJ (2018) Coal endowment, resource curse, and high coal-consuming industries location: analysis based on large-scale data. Resour Conserv Recycl 129:333–344
Stijns JPC (2005) Natural resource abundance and economic growth revisited. Res Policy 30(2):107–130
Sun YP, Ye CS (2011) Resource dependence, geographical location and urban economic growth modern economic. science 1:114–123
Sun HP, Geng Y, Hu LX, Shi LY, Xu T (2018a) Measuring China’s new energy vehicle patents: a social network analysis approach. Energy 153:685–693
Sun HP, Sun WF, Geng Y, Kong YS (2018b) Natural resource dependence, public education investment, and human capital accumulation. Pet Sci 15(3):657–665
Van der Ploeg F (2011) Natural resources: curse or blessing? J Econ Lit 49:366–420
Van Der Ploeg F, Poelhekke S (2017) The impact of natural resources: survey of recent quantitative evidence. J Dev Stud 53:205–216
Van der Ploeg F, Venables T (2009) Symposium on resource rich economies introduction. Oxf Econ Pap 61:625–627
Venables AJ (2016) Using natural resources for development: why has it proven so difficult? J Econ Perspect 30:161–184
Weber JG (2014) A decade of natural gas development: the makings of a resource curse? Resour Energy Econ 37:168–183
Xu KN, Wang J (2006) An empirical study of a linkage between natural resource abundance and economic development. Economic Research Journal 1:78–89
Zhang FM et al (2016) Escaping the resource curse mining revenue factor allocation and social welfare. Business Press, Beijing
Zhou XJ, Guo PB (2015) On-spot transformation of coal resources and avoidance of the resource curse. Resources Science 37(2):318–324
The authors appreciate the valuable comments of the anonymous referees. The English in this document has been checked by at least two professional editors, both native speakers of English.
The authors are grateful for the financial support provided by the National Natural Science Foundation of China (Nos. 71810107001, 71774071, 71690241, 71573121, 71473233), the China Postdoctoral Science Foundation (No. 2016M601568), the Soft Science Project in Zhenjiang (YJ2018004), the Young Academic Leader Project of Jiangsu University (No. 5521380003), and the Education Science Research Project of Shanxi (GH-16082).
1. The crowding-in effect of natural resource dependence on public education expenditure behavior has been identified.
2. The crowding-in effect of natural resource dependence only affects public education expenditure behavior in the central and western regions.
3. It is recommended that areas rich in natural resources increase investment in public education.
Responsible editor: Philippe Garrigues
About this article
Cite this article
Sun, H., Sun, W., Geng, Y. et al. How does natural resource dependence affect public education spending?. Environ Sci Pollut Res 26, 3666–3674 (2019). https://doi.org/10.1007/s11356-018-3853-6
- Natural resource dependence
- Public education spending
- Resource curse
- Crowding-in effect