Christian Ebeke et al., 2015; Oil, governance and the (mis)allocation of talent indeveloping countries
[Jan 30th, Journal of Development Economics]
Thanks to Sachs and Warner (1995), the topic of Resource Curse has been quite a fertile land for development research. Resources (typically oils and natural gases), growth, and the many links between them give birth to various causal relations (I will talk more about it next time). This paper, actually, does not focus on growth,or development; its subject is human capital, specifically, university talents. According to Murphy et al. (1991), the allocation of talents, as well as the quantity of talents, matters a lot in a country’s development. University students majoring in law degrees are more likely to become rent-seekers, which impedes (at least long term) economic development, but students majoring in engineering degrees are more likely to become entrepreneurs, which will productively promote development. Taking a step further, Ebeke et al. link the talent allocation with the abundance of resource (oil). Their point of view is that resources can affect students’ choice of major in universities, depending on the country’s institutions, or quality of governance. Abundant oil, in bad institutions will encourage students to acquire degrees of law, management, and social science, with whose help they may get into rent-seeking positions, earning higher wages. In good institutions, however, oil abundance will shift talent to degrees ofengineering, manufacturing and construction.
Easy framework: