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Extractive Sectors and the Poor

This paper examines how states that rely on oil and mineral exports address the concerns of the poor. Its central finding is that oil and mineral dependence are strongly associated with unusually bad conditions for the poor. To explain this link, it draws on both original econometric analyses, and recent academic studies. Some of its key findings are:

  • Overall living standards in oil and mineral dependent states are exceptionally low — lower than they should be given their per capita incomes;
  • Higher levels of mineral dependence are strongly correlated with higher poverty rates;
  • Oil and mineral dependent states tend to suffer from exceptionally high rates of child mortality.
  • Oil dependence (though not mineral dependence) is also associated with high rates of child malnutrition; low spending levels on healthcare; low enrollment rates in primary and secondary schools; and low rates of adult literacy;
  • Mineral dependence is strongly correlated with income inequality;
  • Both oil and mineral dependent states are exceptionally vulnerable to economic shocks.


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