domain: shs math sdv.sa.aep qfin

text:
Dialga Issaka
email: issaka.dialga@univ-nantes.fr

Ouoba Youmanli
email: youmanliouoba@yahoo.com

How do extractive resources affect human development ? Evidence from a panel data analysis

Keywords: Extractive resources, Human development, Resource curse, Quality of institutions, Panel JEL Code: Q320, C330

This paper examines the effect of extractive resources on human development. We control for institutional quality through a composite index of institutional quality. Our sample covers 42 countries over the period 2009-2015. Given the small sample size, we use the bias-corrected least square dummy variable method. The results show that extractive resources have a positive and significant effect on human development. Health and education are the channels through which extractive resources affect human development. The quality of institutions improves the effect of extractive resources on health but destroys their positive effect on human development and education. This study reveals that the consideration of institutional quality must be specific to each sector (health and education) in a more in-depth analysis of the effect of extractive resources on human development.

Introduction

While a wide of studies focus on the effects of natural resources on monetary aspects of human development, the interest of policy-makers in non-monetary outcomes has increased, thus strengthening the need for a better understanding of how resource abundance affects human development [START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF]. Most of studies on natural resources abundance/dependence are organized around the Auty (1993)'s resource curse theory. The resource curse thesis establishes a negative relationship between dependence on natural resources and economic growth. Yet it has long been recognized that the endowment of natural resources provides a relative advantage for the country's economic development. From a theoretical point of view, natural resources are expected to have a positive effect on human well-being through the improvement of the living standards. Quality of institutions is increasingly analyzed as one of the key conditions to turn the resource curse into a blessing. [START_REF] Shao | Natural Resource Dependence, Human Capital Accumulation, and Economic Growth: A Combined Explanation for the Resource Curse and the Resource Blessing[END_REF] developed a normative conceptual framework, introducing a variable of institutions to explain the co-existence of the resource blessing and resource curse phenomena.

Empirical evidences on natural resources abundance issue, ranging from the pioneer studies [START_REF] Sachs | Natural Resource Abundance and Economic Growth[END_REF] to the most recent updates [START_REF] Eregha | Oil Resource Abundance, Institutions and Growth: Evidence from Oil Producing African Countries[END_REF][START_REF] Mejía | Mining and Human Capital Accumulation: Evidence from the Colombian Gold Rush[END_REF], seem to emphasis an adverse, even no effect of resource abundance on human development.

Most of evidences highlighted indirect effects of resource abundance on human development.

Based on these literature findings, [START_REF] Badeeb | The Evolution of the Natural Resource Curse Thesis: A Critical Literature Survey[END_REF] summarize the challenges for resources economists as follows: "Recent contrarian studies demonstrate that future research should better address endogeneity of dependence measures, and expand the years of study and range of empirical methodologies used." This point is widely supported by [START_REF] Sun | Natural Resource Dependence, Public Education Investment, and Human Capital Accumulation[END_REF] for whom the rationality of the natural resources metrics selection framework is the most vulnerable aspect of this formulation, as the use of different metrics inevitably produces different conclusions. The authors warn that the adverse effects of resource abundance on economic development are sensitive to the empirical technique and the indicators of abundance in natural resources used. Arezki and Van DerPloeg (2007) also highlighted that the empirical evidence of the resource curse is biased because it does not take into account endogenous parameters such as the quality of institutions.

This paper fills the gap by addressing the following issues: Do extractive resources improve versus worsens human development? To what extent the quality of institutions in the country condition the extractive resources effect on human development? What are the channels through which extractive resources enhance versus degrade human development?

This paper aims to analyze the effect of extractive resources dependence on human development controlling for the quality of institutions. Specifically, the study aims to (i) analyze the effect of institutional quality in the relationship between extractive resources and human development and (ii) identify the channels through which extractive resources would affect human development. As previous authors, we are deeply thinking that the mixed effects of natural resource abundance/dependence on human development lie in the choice of variables and the type of resources to capture these effects.

We use extractive resources revenues as a proxy of natural resources dependence. In the sample and over the analysis period, resource dependence measured by total natural rent averages 10.8% of GDP, with a maximum of 56% for the Congo Democratic Republic and the minimum of 0.06% for Germany. The quality of institutions has been identified in literature as the channel through which natural resources affect human progress. Therefore, we introduce a country's enabling environment index in order to take into account key aspects of institutional quality largely documented in literature. To reduce multi-collinearity issues, given the small size of our sample, the country's enabling environment index is a composite score that we build using the Principal Components Analysis techniques. Finally, we dis-aggregate our outcome variable into its main components to detect the channels through which resource dependence could affect human development level.

The rest of the paper is organized as follows: Section 2 presents the debate in literature regarding the role of natural resources in human development process. Section 3 describes methodology. Section 4 presents and discusses the results. Section 5 carries out robustness tests and analysis. Section 6 concludes the study and provides useful policy implications.

Literature review

Theoretical background

Literature is documented on the effects of natural resource abundance on economic development (economic growth, in particular). However, there is no consensus on the sense of the relationship between resources abundance and human development.

Literature on the effects of natural resources abundance/dependence on human development can be organized around three theoretical frameworks: The natural resources curse theory led by [START_REF] Gelb | Oil Windfalls: Blessing Or Curse? World Bank[END_REF]; [START_REF] Karl | The Paradox of Plenty: Oil Booms and Petro-States[END_REF]; [START_REF] Auty | Resource Abundance and Economic Development[END_REF] and updated by [START_REF] Van Der Ploeg | Natural Resources: Curse or Blessing?[END_REF]; [START_REF] Alberola | Revisiting the Commodity Curse: A Financial Perspective[END_REF] and [START_REF] Yang | The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: the case of the United States[END_REF], the endogenous development theoretical framework pioneered by Romer (1986), [START_REF] Lucas | On the Mechanics of Economic Development[END_REF] and [START_REF] Barro | The Persistence of Unemployment[END_REF];and the theory of institutions (North, 1991).

Regarding the natural resource curse, a large part of literature sustains that many resource-rich regions experience lower incomes and slower income growth rates than resource-poor regions. [START_REF] Douglas | Coal Mining and the Resource Curse in the Eastern United States[END_REF] summarize the resource curse as follows: "A resourcerich region experiences a "resource curse" if the way that it uses its resource wealth detracts from the economic well-being of its people." Literature identifies many possible explanations to this phenomenon. Those include disincentives to human capital formation, negative interactions between extractive industries and social institutions, economic damage from resource price volatility and adverse real exchange rate effects. These adverse effects on the national economy are known as "Dutch disease". Dutch disease refers to the effects of the discovery of huge gas deposits on the Dutch economy in the 1960s and 1970s. The extraction of these deposits generated important profits which led to the development of mining activity at the expense of other sectors of the economy. The increase in national income and demand led to inflationary pressures, while the inflow of capital resulted in a trade surplus and an appreciation of the real exchange rate. This makes the manufacturing and domestic services sectors less competitive. During the mining boom period, economic agents show a strong preference for the present which leads them to neglect the long-term growth goals. Once natural resources are exhausted, the atrophy of the productive base and the over-evaluation of the exchange rate lead to a stagnation of economic activity. The oil boom of the 1970s and 1980s had similar results in countries as Saudi Arabia, Nigeria and Mexico. Dutch disease also refers to other forms of expansion which result in a trade surplus or a surplus in the capital account, generally due to foreign investment in the development of the natural resources. According to Frankel (2012), the exploitation of natural resources usually leads to the following undesirable effects: a real and significant appreciation of the currency1 , an increase in public expenditure due in particular to the increased availability of tax revenue or royalties, an increase in the price of non-transferable goods and sometimes a current account deficit in spite of the increase in revenues from exports of commodities, which could lead to an explosion of foreign debt.

Linked to human development, the part of the endogenous development theory which can be mobilized in this paper is more precisely the human capital accumulation theory. Education and health are identified by development economists such as [START_REF] Sen | Development as Freedom[END_REF] to be the key components of human development in its capabilities definition. As natural resources abundance is more likely to have mixed effects on human and economic development, authors highlighting the negative effects of natural resources on human development will be grouped in the resources curse framework, while authors who support the positive relationship between resource abundance/dependence and human capital accumulation will be identified to the endogenous development framework 2 . [START_REF] Barro | Determinants of Economic Growth: A Cross-Country Empirical Study[END_REF]2001) argues that human capital facilitates the absorption of superior technologies from leading countries. The author assumes that the technology-absorption effect is especially important at the secondary and higher education levels. Similarly, [START_REF] Aghion | Endogenous Growth Theory[END_REF] assert that education creates better conditions for good governance by improving health and enhancing equality. Given the high degree of inequality prevailing in developing countries, education is considered as a better indicator of the median level of development [START_REF] Sen | Development as Freedom[END_REF]. It is theoretically assumed that resource abundance should induce additional investment for human capital, including education and health. As human capital (health and education) as main components of human development, we expect to have a positive effect of natural resources abundance on human development. [START_REF] Sachs | Natural Resource Abundance and Economic Growth[END_REF][START_REF] Sen | Development as Freedom[END_REF] claim that natural resources tend to slow down economic growth in countries that possess or discover them. As economic development is one of the components of human development in [START_REF] Sen | Human capital and human capability[END_REF]'s capabilities definition, this expected negative effect between natural resources abundance and economic growth can lead to a mixed effect 3 . For [START_REF] Zallé | Natural Resources and Economic Growth in Africa: The Role of Institutional Quality and Human Capital[END_REF], natural resources only affect growth in countries with very low levels of human capital. This is in line with [START_REF] Bravo-Ortega | The Relative Richness of the Poor? Natural Resources, Human Capital, and Economic Growth[END_REF] who explain that an increase in a country's natural endowment leads to a reallocation of human 2 Endogenous development refers to any development process wich builds on internal resources, both social, cultural and economic, including natural, environmental and ecosystemic resources. This type of development is facilitated by the commitment and the involvement of the beneficiaries in the process. 3 The Sen's capabilities theory postulates that three elements are essential to human fulfillment : the capability of people to access to a good education and his capability to have a decent standard of living and his capability to lead a long and healthy life.

capital from the industrial sector to the natural resources one. The reallocation of skills increases the economic growth because there is a best allocation of factors of production among economic sectors. The posture of these authors contrast with those of [START_REF] Barro | Determinants of Economic Growth: A Cross-Country Empirical Study[END_REF]2001) who believes that high skill is more likely to increase economic growth through productivity channel. [START_REF] Badeeb | The Evolution of the Natural Resource Curse Thesis: A Critical Literature Survey[END_REF] argue that because the generation of natural resource wealth is not a result of production, it can occur relatively independently of other economic processes and does little to create employment. For example, the oil and gas sectors are among the world's most capital-intensive industries. Thus, this sector creates fewer jobs per unit of capital invested, and the skills required for these jobs usually do not fit the profile of a country's unemployed [START_REF] Karl | The Paradox of Plenty: Oil Booms and Petro-States[END_REF].

The ambiguous relationship between natural resource abundance and human development supports our idea to dis-aggregate the human development variable (human development index) in its core components to better capture the relationship between each component with our selected resources abundance variables in the regression step.

A third framework which could help us to better understand the ambiguous results shown in literature is the theory related to institutional quality. [START_REF] Shao | Natural Resource Dependence, Human Capital Accumulation, and Economic Growth: A Combined Explanation for the Resource Curse and the Resource Blessing[END_REF] develop a theoretical model, introducing an institutional variable to explain the co-existence of the resource blessing and resource curse phenomena. A strong quality of institutions is a relevant factor to guarantee a better allocation and investment of revenues from natural resources [START_REF] Mehlum | Cursed by Resources or Institutions?[END_REF][START_REF] Sala-I-Martin | Addressing the Natural Resource Curse: An Illustration from Nigeria[END_REF]. Rents from natural resources abundance are sometimes used to corrupt bureaucrats, civil society and local communities' leaders. These practices tend to make institutions inefficient. The weakness of institutions favors the diversion of rents from natural resources to the detriment of collective public investments from which education and health could benefit. [START_REF] Carbonnier | Comment conjurer la malédiction des ressources naturelles ?[END_REF] argues that leaders tend to redistribute extractive rents to influential groups in order to stay in power.

Therefore, the weakness of institutions would reduce, even inverse the positive effects of natural resources on human development indicators.

Empirical evidences

There is no empirical consensus on the effect of resources on human development. [START_REF] Havranek | Natural Resources and Economic Growth: A Meta-Analysis[END_REF]'s Meta-Analysis findings are very symptomatic of this lack of consensus. Analyzing 43 studies on natural resources abundance and economic development, the authors find that 40 percent of empirical studies showed a negative effect of natural resources on economic growth, 40 percent find no effect, and 20 percent of these studies highlight a positive effect.

A survey on case studies tends to confirm the meta-analysis findings. [START_REF] Bulte | Resource Intensity, Institutions, and Development[END_REF] show that resource abundance indirectly affects measures of human welfare via its effect on the quality of institutions. But when controlling for this indirect effect, they find no evidence of any direct effect. Analyzing the country level effect in resource-rich Caspian Basin countries of Azerbaijan, Kazakhstan, Russia, and Turkmenistan, [START_REF] Eregha | Oil Resource Abundance, Institutions and Growth: Evidence from Oil Producing African Countries[END_REF] showed that natural resource dependence has potential impact on institutional development. However, the study found weak institutional quality to be culpable for the weak management of resources into economic development. The authors argue that natural resource endowments coupled with very strong institutional framework will not only serve as a catalyst for growth and development, but will also eradicate the curse associated with resource wealth. In contrast, poor governance is more likely to prevail in countries where institutions have not been well developed making that share of resources rent among recipients for their development is inefficient. [START_REF] Costantini | Environment, Human Development and Economic Growth[END_REF] show an adverse effect of resource abundance on human development. The channels of transmission of this negative effect are both weaker institutions and reduced economic growth. Based on crowding-out effects, [START_REF] Gylfason | Development and Growth in Mineral-Rich Countries[END_REF] emphasizes the negative relationship between natural capital and social capital. [START_REF] Carmignani | The Social Development Effects of Primary Commodity Export Dependence[END_REF] provide evidence of a negative effect of primary commodities export dependence on social outcomes. [START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF] examines the effect of resource abundance on human development. He postulates that higher income inequality reduces human development using Sen's Capabilities framework. Using cross-sectional data for the period 1970-2010 and controlling for a set of variables such as inequality, institutional quality, and the level of per-capita income, [START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF] concludes on the existence of negative direct effect of resource abundance on human development. The negative effect operates via income inequality. [START_REF] Venables | Using Natural Resources for Development: Why Has It Proven so Difficult?[END_REF] notes that resource revenues are divided between investors, government, and other claimants. Yet, there is likely to be intense pressure for current spending rather than investment in assets that will be productive over time. This may explain the weak effect between natural resources revenues and human development indicators. Resource curse hypothesis is recently tested in [START_REF] Khan | Natural resource abundance, technological innovation, and human capital nexus with financial development: a case study of China[END_REF], [START_REF] Pan | Does financial risk and fiscal decentralization curb resources curse hypothesis in China? Analyzing the role of globalization[END_REF] and [START_REF] Tufail | Do fiscal decentralization and natural resources rent curb carbon emissions? Evidence from developed countries[END_REF]. In their empirical investigation, the first group of authors highlighted the crowding out effect of natural resources on financial development, controlling for technological innovations, human capital, and trade openness. The last ones showed that fiscal decentralization is one of the best ways to invest resource rents in the local green economy, curbing the resource curse.

Besides the "resource curse effect", some studies highlight "the resource blessing effect".

Using data on natural resource abundance and rents for a panel of 102 countries running from 1970 to 1999, [START_REF] Stijns | Natural Resource Abundance and Human Capital Accumulation[END_REF] shows that natural resource wealth makes a positive and marked difference on human capital accumulation. Political stability does also seem to affect human capital accumulation according to the same investigation. The mechanism is as follows: Any increase in natural resource production activity will generate additional government revenues and a share of these revenues is generally spent on education. However, instrumentation reveals that reverse causality running from education to natural resources does not drive the results. Davis (1995) also finds that human capital accumulation indicators tend to be higher in mineral countries than non-mineral countries. [START_REF] Stijns | Natural Resource Abundance and Human Capital Accumulation[END_REF] shows that resource abundance is associated with high female human capital accumulation across countries. Resource abundance tends to increase health capital accumulation, in particular those of female. El Anshasy and Katsaiti (2015) examine whether economic dependence on various natural resources is associated with lower investment in health. They use panel data for 118 countries for the period 1990-2008 and control for countries' geographical and historical fixed effects, corruption, autocratic regimes, income levels, and initial health status. Their results show no compelling evidence in support of a negative effect of resources on healthcare spending and outcomes. On the contrary, higher dependence on agricultural exports is associated with higher healthcare spending, higher life expectancy, and lower diabetes rates. Similarly, healthcare spending increases with high mineral intensity.

One of interesting results highlighted by [START_REF] Stijns | Natural Resource Abundance and Human Capital Accumulation[END_REF] is that a $1 shock to resource rents ends up generating close to ¢5 of extra educational expenditure per year. So, in our cross-sectional study, we expect to observe similar results as most of our selected countries experienced "natural resources shocks" (mining boom, oil discovery) before our selected year study: year 2009. In the terms of [START_REF] Stijns | Natural Resource Abundance and Human Capital Accumulation[END_REF], "Yesterday's resource abundance translates itself into current higher human capital stocks."

Recent studies on the effects of natural resources on human development are much more mixed. Kim and Lin (2017) find that natural resource dependence improves education but worsens health. [START_REF] Sun | Natural Resource Dependence, Public Education Investment, and Human Capital Accumulation[END_REF] resource, previous studies used either the share of natural resource exports in total exports [START_REF] Sachs | Natural Resource Abundance and Economic Growth[END_REF] or the share of natural in GDP [START_REF] Ouoba | Natural Resources: Funds and Economic Performance of Resource-Rich Countries[END_REF]. Both indicators do not distinguish between the share of natural resources that are subject to the curse and those that are not. Yet, the results of El Anshasy and Katsaiti (2015)showed that the exploitation of some natural resources such as agricultural and forest products and hydrocarbons is not associated with the resource curse. In contrast, the exploitation of sub-soil natural resources (gold, diamonds) is likely to lead to economic under-performance [START_REF] Douglas | Coal Mining and the Resource Curse in the Eastern United States[END_REF].

For this reason, [START_REF] Bulte | Resource Intensity, Institutions, and Development[END_REF] point out the relevance to distinguish between point and diffuse resources. However, the indicators mentioned above include both diffuse and point resources. This research uses the share of royalties to GDP and the share of revenues from extractive resources to GDP, both of which are sub-soil resource indicators 4 . This indicator is in line with weak sustainability theory, which indicates that the necessary condition of economic sustainability is met when economic royalties are equal to the royalties collected The variable represents the human development index which equally weights income levels, health and education. Extractive resources revenues (ERR) represent the share of extractive resources revenues in the gross domestic product. is a vector of other control variables. For robustness analyses, the core components of the HDI such as education and life expectancy are used. Equation 1suggests estimating an empirical model as follows:

it = + ERR it + it + it 2
All the variables used in the model and their definitions are reported in Table A1 in Appendix.

Estimation techniques

The analysis covers 42 countries depending on extractive resources over the period 2009-2015. We do not perform unit root test as univariate unit root tests are known to lack power for samples of small or medium size [START_REF] Palm | Panel unit root tests in the presence of cross-1 sectional dependencies: comparison and implications for medelling[END_REF]. When the number of time periods is small (less than 10 or 15), unit root tests suffer from severe size distortions. This small time dimension (T=7) makes the within estimator biased [START_REF] Nickell | Biases in Dynamic Models with Fixed Effects[END_REF]. Available alternative methods include instrumental variable methods such as two stage least squares [START_REF] Anderson | Estimation of Dynamic Models with Error Components[END_REF] and the generalized method of moments [START_REF] Arellano | Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations[END_REF][START_REF] Blundell | Initial Conditions and Moment Restrictions in Dynamic Panel Data Models[END_REF]. Among these instrumental variable methods, Blundell-Bond (1998) one is considered as the most successful. However, this method uses lagged variables of at least order 2 as instruments. This further reduces the time dimension and reinforces the bias. [START_REF] Kiviet | On Bias, Inconsistency, and Efficiency of Various Estimators in Dynamic Panel Data Models[END_REF] proposes the bias-corrected least square dummy variable. The latter is used in this research. Indeed, it has already been shown that this technique is more appropriate compared to several others, such as that of generalized moments and especially in the case of a balanced panel characterized by T ≤ 20, and N ≤ 50, as in our case (Judson and Owen, 1996). The relevance of such a method is proven by [START_REF] Bruno | Estimation and Inference in Dynamic Unbalanced Panel-Data Models with a Small Number of Individuals[END_REF] for unbalanced panels. In biascorrected least square dummy variable, all control variables are assumed exogenous. To minimize biases, variables must include lags, that introduces the dynamic in the models [START_REF] Wintoki | Endogeneity and the Dynamics of Internal Corporate Governance[END_REF]. However, potential issues of simultaneity may persist. So, we consider lagged variables of order 1. In addition, we perform robustness analysis using [START_REF] Driscoll | Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data[END_REF]technique where all variables are considered with a lag of order 1, which allows us to address potential endogeneity issues that would exist in the model.

Furthermore, in this robustness analysis, the HDI is dis-aggregated into its various components such as education and health.

Data description and sources

Combining constraints on data availability and the criteria for defining a resource-dependence country established by the IMF and the Natural Resource Governance Institute 5 , we selected 42 countries over the world. Both institutions consider a country as natural resourcesdependence country since the contribution of these resources represents at least 25 percent of GDP, exports or tax revenues. The most popular measure of resource dependence in the literature is primary exports in percent of GDP (or GNI, or total exports). This variable was used in the seminal contributions of [START_REF] Sachs | Fundamental Sources of Long-Run Growth[END_REF]2001)

Results and discussion

Multivariate analysis

This section analyses the general structure of our selected interest variables. Table 2 shows that there is no statistically significant correlation between the HDI and extractive resources revenues on the one hand and between extractive revenues and the components of the HDI on the other hand. The institutional environment is positively and significantly correlated with HDI and its components. In contrast, the institutional variable and extractive revenues, including royalties, vary in opposite directions, suggesting a conflicting relationship between natural resource dependence and institutional quality. The absence of a statistically significant correlation would indicate that rents from the exploitation of extractive resources are not reinvested in human development. This exploratory result could also suggest that the mobilization of rents from extractive resources is not sufficient to induce observable effects on the level of human development.

The high positive and significant relationship between royalties and extractive revenues indicates that a great part of extractive revenues comes from royalties. In other words, royalties seem to be the best channel through which governments capture extractive resources rents. The very strong and significant correlations between HDI and the health and education variables are also trivial as the two variables are the main components of HDI.

Finally, the VIF calculation showed that multicollinearity was not a problem, as all VIFs were less than 10 (see Table A4 in appendix). Figure 1seems to corroborate correlation tests. However, the linear fit seems to suggest an inverse relationship between the HDI variable and extractive resources for observations close to the fit line. However, several observations are far from the adjustment line. This would explain why, on average, there is ultimately no statistically significant relationship between the HDI variable and extractive resource revenues.

Figure 1-Relationship between Human Development Index and Revenues of extractive resources

Source: Authors' construction using data of UNDP and EITI

The observation of Figure 1 reveals clusters suggesting that for a better visualization of the relationship between our variables of interest, it might be more appropriate to group countries by homogeneous categories. To do this, we rely on the four categories of countries defined by the UNDP according to their level of human development. Countries with the HDI score between 0.800 and 1 are considered as the "very high human development" countries. Those for whom the score ranges from 0.700 to 0.799 are called "high human development"

countries. The third ones named the "medium human development" countries are those with the HDI score ranging from 0.555 to 0.699. The term "low human development" countries is used to design countries for whom the HDI score ranges from 0 to 0.549. Our selected countries can be grouped in two levels of human development. The first one includes both the

Fitted values hdi1

Zimbabwe. Replication of Figure 1 by groups of homogeneous countries reveals that the general appearance of this figure is driven by group 2, which has the largest number of countries. Finally, this investigation through the distribution of countries into homogeneous clusters does not bring any new information. However, the general picture could blind country-specific trend. We check these presumptions in the following section through econometric investigations.

Econometric results

Estimation of the effect of extractive resources on the human development index was done using the bias-corrected least square dummy variable 8 . The bias is corrected using Blundell-Bond, Anderson and Hsiao and Blundell and Bond. Results show that the auto-regressive nature of the HDI is confirmed for all regressions. The positive and statistically significant coefficients of the initial HDI indicate that there is no convergence in human development. In addition, extractive resources have a positive and significant effect on the HDI. Results highlight empirical evidence that extractive resources contribute to improving the level of human development in the selected countries. However, the positive effect would be observed in countries with less endowment in natural resources. Pérez and Claveria (2020) observed a tenuous negative association between average growth in human development and the relative weight of mineral rents in ten African countries with the highest share of mineral exports compared to total exports. Using the Quantile Regression (QR) technique, Mignamissi and Kuete (2020) showed that the total of resource rents seem to have a positive influence on human happiness for QR before the 50 th quantile. However, for quantiles over the 50 th , the effect tends to be negative. The authors conclude that countries which have few natural resources apply the best management mechanisms compared to countries which are highly endowed with them. These results are consistent with work that shows that resource-rich 8Royalty analysis did not produce relevant results and these were not reported in the table.

countries are not always victims of the resource curse (Stijns 2006;2001;[START_REF] Barro | Determinants of Economic Growth: A Cross-Country Empirical Study[END_REF]2001) but are at the opposite end of the scale of those who find that most resource-rich countries are [START_REF] Redmond | Role of natural resource abundance, international trade and financial development in the economic development of selected countries[END_REF][START_REF] Douglas | Coal Mining and the Resource Curse in the Eastern United States[END_REF][START_REF] Venables | Using Natural Resources for Development: Why Has It Proven so Difficult?[END_REF][START_REF] Carbonnier | Comment conjurer la malédiction des ressources naturelles ?[END_REF][START_REF] Costantini | Environment, Human Development and Economic Growth[END_REF]. This result may be partly explained by the fact that most of the work on the resource curse uses the growth rate instead of the human development index.

These analyses reveal that the issue of the curse in empirical work is a statistical mirage, as [START_REF] James | The Resource Curse: A Statistical Mirage?[END_REF] points out. Taking into account the institutional environment, the results showed that resources curse is explained by the institutions quality due to its negative effect on human development. The negative effect of interaction variable on human development reinforces this finding. The finding also corroborates that of [START_REF] Mehlum | Cursed by Resources or Institutions?[END_REF], who demonstrate the importance of the quality of the institutional environment to ward off the resource curse. They

showed that more natural resources push aggregate income down, when institutions are grabber friendly, while more resources raise income, when institutions are producer friendly.

Therefore, human development in resources-rich countries depends on the quality of institutions.

Regarding control variables, results reported in Table 3 show that GDP per capita has a positive and significant effect on HDI. This result suggests that human development in the developing countries will not be able to "catch up" with that of the developed nations [START_REF] Saha | Democracy-Growth Nexus and Its Interaction Effect on Human Development: A Cross-National Analysis[END_REF]. The growth of income is needed in improving human development level.

Robustness analysis

The robustness analysis consisted of estimating the effect of extractive resources on health and education, both essential components of HDI as well as Driscoll and Kraay's estimation technique.

Regarding heath outcome, results show a persistent phenomenon whereas extractive resources have an adverse effect on life expectancy (see Table 4). This effect is significant for the estimation (2), ( 4) and ( 6). Thus, analyzing the specific case of health, it appears that the previous health condition affects positively and significantly the level of health observed in the present. However, the results reveal that extractive resources degrade the health of populations. Similar results were highlighted by Cockx and Francken (2016) who showed that natural resource dependence exerts an adverse effect on health care expenditure. This result could reflect the failure of some States to invest extractive resource rents in the health sector.

Several studies have already shown that resource-rich countries invest less in the health sector [START_REF] Venables | Using Natural Resources for Development: Why Has It Proven so Difficult?[END_REF][START_REF] El Anshasy | Are Natural Resources Bad for Health?[END_REF][START_REF] Cockx | Extending the Concept of the Resource Curse: Natural Resources and Public Spending on Health[END_REF]2016;[START_REF] Carbonnier | Comment conjurer la malédiction des ressources naturelles ?[END_REF][START_REF] Birdsall | Natural Resources, Human Capital[END_REF]).Yet, as [START_REF] Hartwick | Intergenerational Equity and the Investing of Rents from Exhaustible Resources[END_REF] points out, the best way to manage exhaustible extractive resources is to reinvest in human capital, including health and education. As indicated by Zafar et al ( 2019) and [START_REF] Ahmed | Moving towards a sustainable environment: the dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China[END_REF], human capital reduces environmental deterioration as it stimulates societies' readiness to use environment-friendly technologies which in turn improved human health.

The effect of extractive resources on health improves when taking into account the institutional environment. An improvement in the quality of institutions is therefore essential for extractive resource rents to be used in financing health sector. Regarding the education variable, results reported in Table 5 show a persistent phenomenon.

The stock of educational capital accumulated in the past has a positive effect on the current level of education. Extractive resources exert a positive and significant effect on education.

This result is in line with those of Stijns (2006) who highlights that natural resources abundance tends to favor human capital accumulation in particular education as extractive activities require high skills. Previously, [START_REF] Stijns | Natural Resource Abundance and Human Capital Accumulation[END_REF] showed that a $1 shock to resource rents ends up generating close to ¢5 of extra educational expenditure per year. This result reflects the increase in public spending on education induced by extractive resource rents. In fact, in countries with abundant natural resources, the budget constraint is much less rigid because of the significant contribution of natural resource rents to government revenues.

In addition, taking into account the interaction between institutional environment and extractive resources, the effect is negative (estimation 4). This result reveals the fact that dependence on extractive resources negatively affects the quality of the institutional environment which in turn reduces the level of education. This finding is in line with the analysis carried out by [START_REF] Baena | Funds from Non-Renewable Energy Resources: Policy Lessons from Alaska and Alberta[END_REF] who show that natural resources can lead to the degradation of institutions or that poor institutional quality can lead to poor management of natural resources.

In addition, physical capital has a negative impact on educational attainment. This result may reflect the fact that education and physical capital are two conflicting factors in resource allocation. Ouoba (2020) showed that the trade-off between human and physical capital could explain the resource curse experienced by most resource-rich countries. Therefore, increases in human capital could either raise or lower the returns on physical capital, depending on the degree of substitution between the two forms of capital in both production and consumption. In order to further analyze robustness, the Driscoll-Kraay technique was used. This technique, similar to the previous ones, allows to take into account issues of endogeneity by using lags variables [START_REF] Cerra | Growth Dynamics: The Myth of Economic Recovery[END_REF]. Results are summarized in Table 6. Results show a positive effect of extractive resources revenues on human development. This finding is consistent with our previous results using the bias-corrected least square dummy method (see Table 3). Similarly, the signs of our interest variables do not change depending on the estimation method. Overall, most of the other variables signs remain and some are now having significant effects. For example, trade openness affects negatively health of populations but contribute to education level and human development improvement. These results are in line with theory and facts. For example, several epidemics have become pandemics with globalization. The example that perfectly illustrates this is COVID-19, which very quickly became a global epidemic because of globalization. Moreover, trade openness can lead to skill accumulation, forming wage price signals, stimulating human capital investment and thus promoting human capital accumulation [START_REF] Bonfatti | Trade and the allocation of talent with capital market imperfections[END_REF]. As extractives industries are technology-intensive, trade is conducive to the promotion of human capital because of the introduction of a lot of capital and technology-intensive equipment bringing more technology imitation and learning opportunities [START_REF] Kan | An empirical study on the influence of foreign trade and FDI on human capital efficiency in China based on provincial panel data[END_REF].

Furthermore, CO2 emissions degrade the health conditions of people. Natural resources depletion due to extraction is associated with CO2 emissions which affect negatively health outcomes. This result is similar to that found by [START_REF] Ali | The Impact of Socio-Economic Factors on Life Expectancy for Sultanate of Oman: An Empirical Analysis[END_REF]. Environmental regulation is also an important component as resource extraction induces CO2 emissions that have consequences on the health of populations. Finally, investing revenues from the extractive sector in sectors such as health and education is fundamental for the improvement of human development. The effect of the institutional environment is not the same across

Conclusion and policy implications

This study aimed to analyze the effect of extractive resources on human development in 42 countries over the period 2009-2015. Given the weakness of the time dimension and the potential issues of endogeneity, the bias-corrected least square dummy variable and the Driscoll-Kraay methods were used. Similarly, given the importance of the institutional environment in explaining the relationship between extractive resources and human development, a composite index of institutional quality was constructed using the PCA method.

The results show that extractive resources have a positive and significant effect on the HDI.

The effect is still small and is attributable to the low average level of these resources. In-depth analysis by taking into account the institutional environment shows that the effect is negative.

This reflects the negative effect that resources have on the institutional quality. Resources extraction would degrade the quality of institutions, which in turn affect negatively human development.

In addition, analyses of robustness across HDI components such as education and health, and the Driscoll-Kraay technique, show that the results are broadly stable. However, the way that extractive resources revenues affect the quality of institutions depends on the sector under consideration (health or education).

The results suggest that the resource curse is related to the quality of the institutions and the sector considered. This curse can be further countered by using these resources to improve the quality of institutions which in turn would serve a good management of resources for the benefit of human development. Ultimately, improving the quality of institutions must be a prerequisite for the exploitation of extractive resources for the benefit of human development. The effect of the institutional environment is not the same across sectors (education and health). Future research could take into account the specificity of each sector in terms of governance for further analysis.

  highlight the crowding-out effect of natural resources on human capital in China. Their empirical results show that the crowding-out effect can be reduced by investing massive resources rents in education.[START_REF] Farzanegan | Does Oil Rents Dependency Reduce the Quality of Education?[END_REF]find a significant positive effect of oil rents on the quantity of education measured by government spending on primary and secondary education. However, they find a robust and negative longrun effect of oil rents dependency on the objective and subjective indicators of quality of education.[START_REF] Nikzadian | The Effects of Resource Rent, Human Capital and Government Effectiveness on Government Health Expenditure in Organization of the Petroleum Exporting Countries[END_REF] explore the effect of oil resource rent on human development in the context of OPEC countries. Their results show that the oil rents affect the healthcare sector. However, the magnitude of the positive effect decrease when they interact oil rent variable with the government effectiveness in the regression. Authors conclude that, the key determinant in the transformation of rents from oil resources into disaster or blessing is the government effectiveness across oil exporting countries. Mejía (2020)'s results indicate that mining increases enrollment in primary school and reduces dropout rates throughout the school cycle. However, it also reduces standardized test scores and college enrollment, particularly in academic degrees and STEM fields.[START_REF] Rahim | Do Natural Resources Abundance and Human Capital Development Promote Economic Growth? A Study on the Resource Curse Hypothesis in Next Eleven Countries[END_REF] analyze the role of human capital development in the resource curse effect mitigation. Their results show that natural resources rent deteriorate economic growth since high natural resources rent are found to inhibit economic growth of the selected countries. Authors support that human capital development is one of ways to overcome resource curse, since the interaction effect suggests that human capital and natural resources jointly exert positive impacts on economic growth. From the sustainability point of view, Ahmad et al. (2020)'s econometric results show that natural resources and economic growth increase and expand the ecological footprint. Their results suggest that natural resource exploitation, even with green technology, tends to delay achievement of SDG targets. Khan et al. (2021) investigate the role of human development and quality of institutions on the quality of the environment. Their results support that high levels of both variables are associated with high quality of the environment. Khan et al. (2021)'s results can be interpreted as the solution to Ahmad et al. (2020)'s findings: Investing rents in human and institutional capital helps to mitigate the environmental damage caused by the exploitation of natural resources. 3. Methodology and data description 3.1. Variables and Model specification This paper aims at analyzing the effect of extractive resources on human development. The research is based on the natural resource curse theory. Although the empirical literature on the natural resource curse is abundant, this research differs from others in its use of new indicators of natural resource dependence and the institutional environment on the one hand, and the use of a human development indicator on the other. Regarding dependence to natural

  from the extractive sector[START_REF] Blignaut | Assessment of the Performance and Sustainability of Mining Sub-Soil Assets for Economic Development in South Africa[END_REF]. Moreover, it allows checking whether the royalties collected are likely to have a significant and positive impact on human development and thus avoid the trap of the curse. The use of such an indicator is relevant as royalties represent in most countries the largest share of revenues collected by governments from the extractive sector. Beyond royalties, the share of extractive resources to GDP is also used as an indicator of natural resource dependence. It takes into account, in addition to royalties, other taxes related to the extractive sector (there are about 30 of them in the EITI typology). Since this indicator only takes into account revenues related to the sector, it is also relevant as a proxy for dependence on extractive resources.

  UNDP's very high and high human development. The last two sets are the middle human development and the low human development countries. Considering our selected countries, the first set of countries consists of 4 countries: Germany, Norway, United Kingdom and United States. The second group includes 38 countries ranging from Burkina Faso to

  essential to generate better governance and minimized rent seeking. Environmental regulation is also an important component insofar as resource extraction is accompanied by CO2 emissions that have consequences on the health of populations. Therefore, governments should promote more efficient price mechanisms and environmental management systems to help minimizing impacts on environment and health. Finally, the orientation of revenues from the extractive sector towards sectors such as health and education is fundamental for the improvement of human development. These investments are necessary to ensure intergenerational equity in the extractive sector.

Table 1 -

 1 Table 1 reports statistics on the share of different types of resources in GDP. Extractive resources dependence indicators for the selected countriesRegarding human development concept, there is very little use of the HDI in analyses of the resource curse.[START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF];[START_REF] Costantini | Environment, Human Development and Economic Growth[END_REF] used variables including life expectancy at birth, rate of child immunization against diphtheria, pertussis, and tetanus, and average years of education in the population as proxies of human development. However, HDI as an indicator is relevant when looking at the specific case of the extractive sector.Indeed, the exploitation of extractive resources is generally carried out by national or foreign companies. These companies, because of their social responsibility, invest in basic socioeconomic infrastructure. The use of HDI and its dis-aggregation into its various components (education and health) allows a better appreciation of the contribution of extractive companies in human development achievement in the natural resource-dependent countries.Finally, traditional control variables such as physical capital, trade openness are used. The effect of extractive resources on development depends on the institutional context[START_REF] Mehlum | Cursed by Resources or Institutions?[END_REF]. Several studies have taken into account the institutional context through governance indicators either by using a composite index or simple indicators as proxies (corruption, rule of law). The latter case is commonly used in the empirical literature.However, the choice of a few governance indicators from among many others is generally not well justified. That is why, in this research, it appeared necessary to use principal component analysis technique to identify relevant indicators from among those provided by the ICRG

	Variable (%	Obs	Mean	Std.Dev.	Min	Max
	of GDP)
	Total rents	420	10.887	10.289	.065	56.039
	Coal rents	420	.39	1.886	0	25.965
	Mineral rent	420	1.733	2.901	0	14.377
	Gas rents	420	.688	1.376	0	9.409
	Source: Authors, from World Development Indicators (2021)

database. The selected indicators include democratic accountability, bureaucracy quality, government stability, law and order, level of corruption and socioeconomic conditions. These indicators are used to construct the Country's Enabling Environment Index (CEEI). Details on the Ceeindex methodology is given in section 3.3.

  . It aims to take into account issues about resource governance, transparency and quality of institutions. The index uses the following variables: democratic accountability, bureaucracy quality, government stability, law and order, level of corruption and socioeconomic conditions. The selection of these variables is based on the Natural Resource Governance Institute and International Country Risk Guide annual reports. These reports highlight the relevance of such factors in the process of transforming natural resources revenues into human assets. We aggregate the six initial variables into a single index in order to reduce high number of variables in the regression step, given the related small size of our sample. Human development variables including human development index scores, health

	Investment profile and GDP per capita growth. The Country's enabling environment index is
	built using the Natural Resource Governance definition 7 . This index is our own construction
	using the Principal Components Analysis (PCA) techniques to generate weights for

and in Sala-i-

[START_REF] Sala-I-Martin | Addressing the Natural Resource Curse: An Illustration from Nigeria[END_REF]

;

[START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF]

. However, authors including

[START_REF] Brunnschweiler | The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings[END_REF]

;

[START_REF] Arezki | Do Natural Resources Depress Income per Capita?[END_REF][START_REF] Carmignani | Development Outcomes, Resource Abundance, and the Transmission through Inequality[END_REF]

consider primary exports as a measure of resource dependence rather than resource abundance. Indeed, primary exports are a flow variable which would underestimate the extent of resource abundance for countries which use their resources domestically instead of exporting them.

Our countries' selection criterion refers to that last one as our two main interest variables are part of royalties and extractives resources revenues to GDP. Data cover the period 2009-2015 and are from various international databases including the Extractive Industries Transparency Initiative (EITI) database, in free open access 6 for natural resources revenues, royalties; the world development indicators (WDI) database for our selected control variables. Those include traditional determinants of physical capital such as Gross fixed capital formation, 5https://www.resourcegovernanceindex.org/ 6https://drive.google.com/drive/folders/0B9Bl74fkjArzcWtDMDE3eUtYajA 7The Natural Governance Institute defines « Enabling environment" as the wide range of practices and processes in the government, parliament, media and civil society that are likely to either enable or disable the effectiveness of resource policies and governance. aggregation(Life expectancy at birth) and education (Mean years of schooling and Expected years of schooling) variables are from the UNPD database. All variables are re-scaled, ranging from zero to 100 using the min-max method. The sample list of countries is given in Table

A3

in Appendix.

Table 2 -Pairwise correlations matrix of interest variables

 2

	Variables	(1)	(2)	(3)	(4)	(5)	(6)
	(1) HDI	1.000
	(2) Education	0.951	1.000
		*
	(3) Health	0.884	0.769	1.000
		*	*
	(4) Extractive resources	0.034 0.021 0.028 1.000
	revenues (ERR)
	(5) Royalties	0.034 0.021 0.028 1.000	1.000
					*
	(6) Ceeindex	0.519	0.531	0.461	-0.021 -0.021 1.000
		*	*	*
	Source: Authors			* shows significance at the 0.05 level

Table 3 -Effect of extractive resources revenues on HDI

 3

		(1)		(2)	(3)	(4)	(5)	(6)
	Variables	Blundell-Bond	Arrelano-Hsiao	Arellano-Bond
	Human development (lag)	0.927***		0.929***	0.921***	0.922***	0.918***	0.919***
		(0.0255)		(0.0255)	(0.0274)	(0.0275)	(0.0269)	(0.0270)
	Extractive resources	0.00432*		0.0245**	0.00408*	0.0241**	0.00398	0.0240**
	revenues (ERR)
		(0.000840)	(0.00243)	(0.000825)	(0.00237)	(0.000815)	(0.00234)
	Physical capital	0.187		0.182*	0.194	0.189*	0.199	0.194*
		(0.164)		(0.164)	(0.164)	(0.164)	(0.162)	(0.162)
	Trade	0.0698		0.0685	0.0691	0.0678	0.0696	0.0683
		(0.0862)		(0.0865)	(0.0852)	(0.0854)	(0.0842)	(0.0843)
	Ceeindex	-0.0410**	-0.0486**	-0.0338**	-0.0411**	-0.0298**	-0.0371**
		(0.0124)		(0.0124)	(0.0124)	(0.0123)	(0.0123)	(0.0122)
	GDP per capita (log)	0.586**		0.581**	0.600**	0.596**	0.604**	0.600**
		(0.246)		(0.245)	(0.252)	(0.252)	(0.249)	(0.249)
	ERR* Ceeindex			-0.0404**		-0.0398**		-0.0397**
				(0.00407)		(0.00398)		(0.00393)
	Observations	233		233	233	233	233	233
	Number of id	39		39	39	39	39	39
	Source: authors	Standard errors in parentheses*** p<0.01, ** p<0.05, * p<0.1

Table 4 -Effect of extractive resources revenues on Health

 4

	Dependent variable : Health

Table 5 -Effect of extractive resources revenues on Education

 5

	Dependent variable : Education

This appreciation takes the form of an appreciation of the nominal currency in countries with a floating exchange rate and in the form of inflows and inflation in fixed exchange rate regimes.

sectors (education and health). Future research could take into account the specificity of each 578 sector in terms of governance for further analysis.