V. H. Lana Pinto, Lorena V. Costa, L. B. De Mattos
{"title":"Are commodity exports a road to weaker institutions? Causal inference through a natural experiment","authors":"V. H. Lana Pinto, Lorena V. Costa, L. B. De Mattos","doi":"10.1002/agr.21943","DOIUrl":null,"url":null,"abstract":"Countries rich in natural resources are typically major exporters of commodities worldwide. Specialization in such goods may create incentives for certain groups to hinder a country's institutional development. Therefore, in this article, we investigate the causal relationship between commodity exports and the institutional quality of 49 countries from 1997 to 2022. Given that commodity exports can both influence and be influenced by institutional quality, it is crucial to search for exogenous natural variations in commodity exports in combination with econometric modeling strategies. To address the endogeneity problem, we use a natural experiment—China's accession to the World Trade Organization—to establish a causal link between agricultural exports and institutional quality free from bias. Our results highlight that increased reliance on commodity exports is linked to detrimental effects on a country's institutions. It diminishes citizen participation, increases the risk of political violence, lowers public service quality, hampers private sector development, erodes trust in societal rules, and amplifies corruption. The findings confirm the negative relationship between commodity exports and institutional development. They also contribute to the resource‐curse debate by showing that agricultural exporters with abundant natural resources negatively impact institutions. Additionally, a causal relationship is established, demonstrating that focusing on commodity exports reduces institutional effectiveness, with the study's quality enhanced by using various commodity product bundles and alternating institutional quality measures. EconLit Citations: F13, F55, Q0.","PeriodicalId":55544,"journal":{"name":"Agribusiness","volume":null,"pages":null},"PeriodicalIF":2.1000,"publicationDate":"2024-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Agribusiness","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1002/agr.21943","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"AGRICULTURAL ECONOMICS & POLICY","Score":null,"Total":0}
引用次数: 0
Abstract
Countries rich in natural resources are typically major exporters of commodities worldwide. Specialization in such goods may create incentives for certain groups to hinder a country's institutional development. Therefore, in this article, we investigate the causal relationship between commodity exports and the institutional quality of 49 countries from 1997 to 2022. Given that commodity exports can both influence and be influenced by institutional quality, it is crucial to search for exogenous natural variations in commodity exports in combination with econometric modeling strategies. To address the endogeneity problem, we use a natural experiment—China's accession to the World Trade Organization—to establish a causal link between agricultural exports and institutional quality free from bias. Our results highlight that increased reliance on commodity exports is linked to detrimental effects on a country's institutions. It diminishes citizen participation, increases the risk of political violence, lowers public service quality, hampers private sector development, erodes trust in societal rules, and amplifies corruption. The findings confirm the negative relationship between commodity exports and institutional development. They also contribute to the resource‐curse debate by showing that agricultural exporters with abundant natural resources negatively impact institutions. Additionally, a causal relationship is established, demonstrating that focusing on commodity exports reduces institutional effectiveness, with the study's quality enhanced by using various commodity product bundles and alternating institutional quality measures. EconLit Citations: F13, F55, Q0.
期刊介绍:
Agribusiness: An International Journal publishes research that improves our understanding of how food systems work, how they are evolving, and how public and/or private actions affect the performance of the global agro-industrial complex. The journal focuses on the application of economic analysis to the organization and performance of firms and markets in industrial food systems. Subject matter areas include supply and demand analysis, industrial organization analysis, price and trade analysis, marketing, finance, and public policy analysis. International, cross-country comparative, and within-country studies are welcome. To facilitate research the journal’s Forum section, on an intermittent basis, offers commentary and reports on business policy issues.