Natural Resources, Governance and Structural Transformation in Central Africa: Empirical Analysis Using the Panel Corrected Standard Errors (PCSE) and the Feasible Generalized Least Squares (FGLS)
This study aims to enrich the existing literature on the importance of escaping the natural resource curse, by exploring how governance can moderate the effects of natural resources on structural transformation. The focus is on ten Central Africa nations for the period 1996-2023, and the empirical evidences are based on interactive Panel Corrected Standard Errors (PCSE) and the Feasible Generalized Least Squares (FGLS). The Natural resource rents are measured by the benefits from the total natural resources. The Governance components indices and the composite Index from the Principal Components Analysis (PCA) are employed as moderators. The hypothesis that governance components indices combined to Natural resource rents influence structural transformation in a mixed ways is evident. However, the hypothesis that the Governance composite index interacting with Natural resource rents exerts a negative influence on structural transformation is not confirmed, as the estimated relationship is statistically non-significant. For the hypothesis (3), Natural resources rents having a negative direct effect on structural transformation is verified while, governance composite index having direct negative influence on structural transformation is non-significant. Explanations for the non-validation of certain hypotheses are provided, and relevant policy implications are discussed.
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