Re‐Examining the Mediating Role of Institutional Quality in the Relationship Between Poverty and Natural Resources

A Finite Mixture Model Application

Bibliographic Data

ID6445832
AuthorsJules Médard Nana Djomo (0000-0002-8939-8507, Université de Yaoundé I), Boniface Ngah Epo (0000-0002-2743-7056, Université de Yaoundé I), David Arsène Temching Sonkeng Etame (Université de Yaoundé I), Heleine Nguimatsia Ngueuna (Université de Dschang)
Year2025
Volume17
Issue4
Publication date2025-10-23
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenuePoverty & Public Policy (JOURNAL)
Journal identifiersISSN: 1944-2858 • E-ISSN: 2194-6027
PublisherWiley (PUBLISHER • GB)
DOI10.1002/pop4.70034
OpenAlexW4415471129
LanguageEN
References cited109

This study contributes to the understanding of how institutional quality influences the relationship between natural resources and poverty. The study uses data from 80 countries over a period ranging from 1996 to 2020, enabling a robust temporal and cross‐sectional analysis. We use four methods, namely (i) the Generalized Method of Moments utilized to address endogeneity issues, ensuring that the estimates are robust and reliable; (ii) Feasible Generalized Least Squares employed to test for heteroscedasticity, improving the efficiency of the estimators; (iii) Finite Mixture Model addresses heterogeneity among countries, recognizing that different groups may respond differently to natural resource wealth based on institutional contexts; and (iv) Panel Smooth Transition Regression captures nonlinear relationships and allows for varying effects of institutional quality across different contexts. The main results show that two out of the four classes of countries exhibit a resource curse, suggesting that in these contexts, resource wealth does not translate into economic benefits and may even exacerbate poverty. Furthermore, natural resources can have a positive impact on poverty reduction, but this effect depends on certain thresholds of institutional quality. In countries with adequate governance and institutional frameworks, natural resource wealth can lead to significant improvements in poverty

International Development and Aid · Mining and Resource Management · Natural Resources and Economic Development

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