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  • Cited by 3
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    This article has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Zhen, Nahui Fu, Bojie Lu, Yihe and Wang, Shuai 2014. Poverty reduction, environmental protection and ecosystem services: A prospective theory for sustainable development. Chinese Geographical Science, Vol. 24, Issue. 1, p. 83.

    EHMKE, MARIAH D. and SHOGREN, JASON F. 2009. Experimental methods for environment and development economics. Environment and Development Economics, Vol. 14, Issue. 04, p. 419.

    Nooruddin, Irfan 2008. The Political Economy of National Debt Burdens, 1970–2000. International Interactions, Vol. 34, Issue. 2, p. 156.


Does high indebtedness increase natural resource exploitation?

  • DOI:
  • Published online: 01 May 2005

The debt-resource-hypothesis suggests that high indebtedness leads to increased natural resource exploitation as well as more unsustainable patterns of resource use. Countries with high debt burdens supposedly increase their extraction of fossil fuels and mineral resources as well as their production of so-called cash crops in order to service their debt obligations. In spite of its popularity, there have been few attempts to systematically test the hypothesis. Existing analyses refer to deforestation only and come to mixed results. This study fills a gap in testing the hypothesis more comprehensively for 23 natural resources and cash crops. It uses first differencing, period-specific time dummies, and a lagged dependent variable to mitigate omitted variable bias. No evidence is found that would support the debt-resource-hypothesis.

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I would like to thank two anonymous referees as well as Steve Gibbons, Marten Goos, Alan Manning and Michele Pellizzari for many helpful suggestions.
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Environment and Development Economics
  • ISSN: 1355-770X
  • EISSN: 1469-4395
  • URL: /core/journals/environment-and-development-economics
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