PhD defence: Mahamady Ouedraogo

Economics and Political Economy of Natural Resources in Developing Countries: Essays on thePrivate Sector, Environmental Policies and Deforestation

Mahamady Ouedraogo
CERDI, Université Clermont Auvergne

Jury

Alban Ahoure, Professor, Université Houphouet Boigny de Cocody, Côte d’Ivoire 
Phu Ngyen-Van, Professor, Université Paris Nanterre, France 
Jean Louis Combes, Professor, Université Clermont Auvergne, France 
Bernadette Dia Kamgnia, Associate Professor, CIRES, Côte d’Ivoire 
Théophile Azomahou, Professor, Supervisor, Université Clermont Auvergne, France
Bertrand Laporte, Associate Professor, Supervisor, Université Clermont Auvergne

Résumé

Natural resources bring both the hope and despair of resource-based development. Some countries, such as Botswana, have relied on these resources to build their economic prosperity over the last fifty years, while others, such as Venezuela and Sierra Leone, have stagnated or even fallen into cycles of violence following the discovery of the resources. This puzzle labeled the “resource curse” has been extensively studied in development economics. However, little attention has been paid to the impact of natural resources on the private sector, in so far as most of the rent from these resources accrues to the government. Yet, the adverse effects of the natural resource discovery, such as Dutch disease, rampant corruption and rent-seeking behavior directly affect the private sector, the engine of growth. In addition, the context of climate change is pushing countries to adopt energy transition policies, which are increasing demand for the mineral resources, essential for green energy production. Caught in the trap between attracting investors and protecting the environment, developing countries are competing for investment in their mining sector. Like climate change, to which African countries will suffer the consequences despite an insignificant contribution to global emissions, the energy transition could come at the cost of an environmental disaster if regulation is lacking in mineral-rich countries. This thesis, dedicated to this issue, focuses firstly on the private sector and secondly on environmental policies and deforestation.

Chapter 1 analyzes the effect of natural resources’ dependence on manufacturing firms’ productivity. Using data from the World Bank’s Enterprise Survey, it shows that dependence on natural resources is detrimental to firms’ productivity. The mechanism operates through real effective exchange rate volatility and corruption. Resource-dependent countries should: consider reforms that: (i) create backward and forward linkages between domestic companies and the extractive sector, in order to limit enclave economies; (ii) combat corruption; and (iii) implement macroeconomic policies that limit shocks on the real effective exchange rate.

Chapter 2 examines the relationship between extractive resources and public capital indeveloping countries. We use the IMF’s new public capital database, which distinguishes between “full public provision” capital and public-private partnership capital, to assess the effect of extractive resources. The results show that extractive resources exert a positive effect on public capital in public-private partnership, while their effect on public capital in “full public provision” is negative. These results highlight the fact that rent-seeking behavior (political or economic) can motivate public investment spending in resource-rich countries.

Chapter 3) borrows from the literature on inter-states fiscal competition and regulation. It examines whether mining-dependent African countries engage in strategic interaction in their environmental commitment using two measures: a de jure environmental policy and a de facto environmental policy. Our results confirm that countries behave strategically in response to their neighbors’ environmental policies. We show that this strategic behavior leads to an increase in regulation (race to the top) for de jure environmental policy and a decrease in regulation (race to the bottom) for de facto environmental policy.

Chapter 4 investigates the link between mining and deforestation in Africa using a spatial econometric framework. The results suggest that mining increases deforestation, while environmental policy helps to reduce deforestation in mineral-rich countries. An increase in mining rents of one percentage point of GDP results in a forest loss of around 50 km2. Furthermore, regional economic communities have heterogeneous effects on deforestation.

Keywords

Politique economy, natural resources, Africa, deforestation, environment.

www.theses.fr/en/s363477