Household Welfare, Capital Flight, and Natural Wealth: Does Resource Distribution and Governance Matter in Five Resource-Rich, Capital Flight-Prone African Economies?

Household Welfare, Capital Flight, and Natural Wealth: Does Resource Distribution and Governance Matter in Five Resource-Rich, Capital Flight-Prone African Economies? | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Household Welfare, Capital Flight, and Natural Wealth: Does Resource Distribution and Governance Matter in Five Resource-Rich, Capital Flight-Prone African Economies? Samson Adeniyi Aladejare, Stephen Kelechi Dimnwobi This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7004857/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Despite enormous natural resources, several African countries continue to grapple with persistent capital flight and limited improvements in household welfare. This paradox raises fundamental concerns regarding the roles of governance and resource distribution on the continent. Accordingly, this paper explores the complex nexus between household welfare, capital flight, and natural resource income in five African economies that are both resource-rich and highly prone to capital flight. Furthermore, it assesses how resource distribution and its interplay with governance affects household well-being. Data spanning from 1980 to 2020 were employed and empirically analysed using the novel pooled Bewley estimator. The findings demonstrated that capital flight depletes resources that would otherwise accelerate economic development and enhance living standards in the long term. Likewise, inefficiencies in natural resource management constrains the fiscal capacity for government investment in social infrastructure, resulting in poor household welfare over time. Moreover, inequitable resource distribution diminishes household well-being in the long run, underscoring challenges in the allocation of income and social infrastructure. However, improved governance quality reduces household living costs and fosters better well-being outcomes. The paper also observes short-term welfare responses and proposes relevant policy measures to these challenges. JEL Classification: D63, I31, O11. Other Public Policy Household well-being Capital flight Natural resource income Resource distribution Institutions Resource-rich economies Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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