Natural resource rents, governance quality, public debt and economic growth in resource-rich countries: A panel data analysis

This study investigates the dynamic relationship between natural resource rents, governance quality, GDP per capita, and public debt in resource-rich economies. Using panel data from 13 resource-rich countries, we employ cross-sectional dependence (Breusch-Pagan LM and Pesaran CD) tests to explore cross-sectional dependencies across variables, and apply the second-generation unit root tests. Unit root tests reveal a mix of stationary and non-stationary variables, validating the appropriateness of the panel ARDL model for cointegration analysis. Empirical findings highlight nuanced relationships: total natural resource rents exhibit a negative impact on public debt, moderated by governance indicators such as control of corruption and rule of law. Governance quality also significantly maers for public debt accumulation in the panel of selected countries. Moreover, GDP per capita demonstrates varying effects on debt reduction across different models. These insights underscore the importance of governance frameworks in managing fiscal outcomes amid resource wealth. The study contributes empirical evidence to inform policy discussions on sustainable economic management in resource-rich contexts.

• Public debt
• total natural resource rents
• resource-rich countries
• governance quality
• economic growth