Resource curse or blessing? A city-level analysis of economic and demographic impacts along the Belt and Road

Abstract

Existing studies on whether resources represent a "curse" or "blessing" have mainly focused on national or provincial levels, overlooking local impacts. By examining 17,455 cities along the Belt and Road from 2002 to 2019, we find that coal extraction fosters a "curse," while oil-gas extraction tends to bring a "blessing." Both effects exhibit non-linear patterns. City-level outcomes also hinge on the host country's conditions. In nations with high resource rents, mining cities generally fare better, but in nations with rapid industrial growth, they are more likely to fall behind. In low-income but high resource-dependent countries, the demographic dimension of the resource curse in mining cities is especially pronounced. There is spatial heterogeneity along the Belt and Road. During the study period, "blessing" areas shrank, raising concerns about future curse risks. Investments and cooperation along the Belt and Road should carefully address the local impacts posed by resource extraction.