Political Economy of Natural Resources and Education; A Study of the Impact of Change in the Resources Rent Management on the Education Quality

This article investigated trade-off between human and natural resources emphasizing on education. Some studies have argued that resource-rich countries are exposed to relying on natural resources and neglecting human resources. So that emphasizing on education as a tool of investing in human resources was declined. Ratio of the share of resources rent to the share of taxes was introduced as representative of political economy of natural resources. This variable controlled effects of changing the natural resources rent management. International tests scores (TIMSS, PIRLS and PISA) were considered as education quality measure. A panel data model with fixed effects approach was applied as econometric method at the estimating of education production function‘s parameters. The findings revealed that effects of political economy of natural resources were significant and then education quality diminished while share of natural resources rent at the government revenues increased. In most cases estimated coefficients for the variable of the share of resources rent to the share of taxes’ ratio were robust and negative effect of reducing the dependence of the economy on resources rent on the quality of education was confirmed.