Political Economy of Natural Resource Depletion

Issues on environments and natural resources are recently getting more attention as there is a growing concern that climate change endangers sustainability of our ecosystem. Moreover, natural resource depletion poses an imminent threat to survival of our generation and, especially, future generations. In this article, I analyze political and economic factors that affect natural resource depletion. I find evidence that cohesive political institutions reduce natural resource depletion while lack of common interests increases it. Among the components of natural resources, depletion of energy resource, rather than forest and mineral, is particularly responsive to political institutions. I also find that, even after controlling for gross domestic product (GDP) per capita, countries with larger stocks of physical and human capital deplete less natural resources. JEL Codes: D70, O13, Q50