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English in India: Testing the Relative Productivity of Instruction Methods with Pratham English Language, Education Program.” Report Columbia University, New York From Mines and Wells to Well-Built Minds Well-Built to Wells Mines and From de la Brière, Filmer, Ringold, Rohner, Samuda, and Denisova Ringold, Rohner, Filmer, de la Brière, DIRECTIONS IN DEVELOPMENT Human Development From Mines and Wells to Well-Built Minds Turning Sub-Saharan Africa’s Natural Resource Wealth into Human Capital Bénédicte de la Brière, Deon Filmer, Dena Ringold, Dominic Rohner, Karelle Samuda, and Anastasiya Denisova From Mines and Wells to Well-Built Minds DIRECTIONS IN DEVELOPMENT Human Development From Mines and Wells to Well-Built Minds Turning Sub-Saharan Africa’s Natural Resource Wealth into Human Capital Bénédicte de la Brière, Deon Filmer, Dena Ringold, Dominic Rohner, Karelle Samuda, and Anastasiya Denisova © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 20 19 18 17 This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: de la Brière, Bénédicte, Deon Filmer, Dena Ringold, Dominic Rohner, Karelle Samuda, and Anastasiya Denisova. 2017. From Mines and Wells to Well-Built Minds: Turning Sub-Saharan Africa’s Natural Resource Wealth into Human Capital. Directions in Development. Washington, DC: World Bank. doi:10.1596/978-1-4648-1005-3. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-1-4648-1005-3 ISBN (electronic): 978-1-4648-1006-0 DOI: 10.1596/978-1-4648-1005-3 Cover photo: © Panos Pictures. Nigeria, Okrika Village, Niger Delta. Photo No. GOS00116NIG. Used with the permission of Panos Pictures; further permission required for reuse. Cover design: Debra Naylor, Naylor Design, Inc. Library of Congress Cataloging-in-Publication Data From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 Contents Foreword xiii Acknowledgments xv About the Authors xvii Abbreviations xix Overview 1 Resource-Rich Countries Have Higher National Incomes, but Their Populations Are Not Less Poor, and Their Human Development Is Low 3 While There Are Compelling Reasons for Resource-Rich Countries to Invest in Human Capital, Their Investment Is Paltry and Ineffective 8 Resource Rents Exacerbate Governance Challenges: Tackling Them Requires Strengthening Institutions, Incentives, and Information 14 The Returns to Making Smart Investments in Human Capital Are High 22 Conclusion: Invest Early and Smartly 26 Notes 27 References 27 Chapter 1 Human Capital in Resource-Rich Countries 31 Abstract 31 Introduction 31 Natural Resource Wealth, National Income, Poverty, and Inequality 33 Natural Resource Wealth and Human Development 41 Public Spending on Education and Health in Resource-Rich Countries 51 Conclusions 56 Notes 56 References 57 From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 v vi Contents Chapter 2 An Economic Rationale for Investing in Human Capital 59 Abstract 59 Why Governments Should Invest in Human Capital 59 Why Governments Do Not Invest More in Human Capital 64 Natural Resource Revenues and Investment in Human Capital 64 Violent Conflict: Human Capital Investment and Political Instability 73 Conclusions 79 Notes 80 References 80 Chapter 3 Delivering Human Development Services in Resource-Rich Countries 89 Abstract 89 Governance Challenges and Service Delivery 89 Levers for Improving the Governance of Service Delivery 107 Notes 131 References 132 Chapter 4 Key Investments to Build the Foundations of Human Capital 143 Abstract 143 The Foundations of Human Capital 143 Interventions to Strengthen the Foundations of Human Capital 152 The Role of Cash Transfers in Increasing Demand for Health and Education Services 166 Going to Scale with ECD and Cash Transfers 168 Conclusions 169 Annex 4A: Cash Transfer Programs in Africa 170 Notes 173 References 173 Boxes O.1 Transparency to Improve the Quality of Political Engagement 18 O.2 Malaysia: Managing Mineral Resources Revenues for Human Development 21 O.3 The Human Capital of Parents and Offspring 23 1.1 Country Classification 34 1.2 New Data on Inequalities in Education and Health Indicators 42 1.3 Gender Gaps in Education Outcomes 50 2.1 Private Returns to Human Capital 60 From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 Contents vii 2.2 Modeling Natural Resources and Human Capital across Generations 65 2.3 Using Dynamic Stochastic General Equilibrium Modeling to Guide Investments 66 2.4 Natural Resources and Conflict 73 2.5 Angola: Conflict, Natural Resource Wealth, and Low Human Development Outcomes 74 2.6 The Effect of Parents’ Education on the Education of Their Children 77 3.1 Does Taxation Increase Transparency? 93 3.2 Service Delivery Indicators: Health and Education Services Need Improvement 96 3.3 Public Expenditures on Health Services in Ethiopia, Guinea, Malawi, Madagascar, Senegal, and Sierra Leone 100 3.4 Eight “Must-Have” Features for an Efficient Public Investment Management System 106 3.5 The Role of Parliaments in Managing Resource Wealth 107 3.6 Results-Based Financing: A Tale of Two Sub-Saharan African Countries 115 3.7 Direct Dividend Payments 116 3.8 Transparency to Improve the Quality of Political Engagement 120 3.9 Social Accountability in Resource-Rich Countries 124 3.10 Botswana: A Diversified Portfolio of Investing Natural Resource Wealth 129 3.11 Chile: Managing Natural Resource Wealth for Stability 130 4.1 The Consequences of Early Childhood Growth Failure over the Life Course in Guatemala 148 4.2 Community-Based Growth Promotion Programs 158 4.3 Mineral Wealth and the Protection of Human Capital 159 4.4 What Types of Interventions Improve Student Learning? 162 4.5 The Role of Technical and Vocational Education and Training 164 4.6 Cash Transfers in Sub-Saharan Africa: What Do They Achieve? 167 Figures O.1 The Prices of Natural Resources Are Volatile: Index of Real Prices, 1990–2015 3 O.2 In SSA, Oil-Rich Countries Grew Substantially Faster Than Other Countries: Cumulative Growth in GNI per Capita, 1995–2013 4 O.3 Resource Wealth Is Not Associated with Substantially Lower Poverty: Headcount Poverty Rates Relative to Non–Resource-Rich SSA Countries at a Poverty Threshold of US$2.50 a Day 5 O.4 Resource-Rich Countries in SSA Fare Poorly on the Human Development Index: HDI and GNI per Capita in 2013 6 From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 viii Contents O.5 Resource-Rich Countries in SSA Have Low School Participation and High Infant Mortality: Indicators Relative to Non–Resource-Rich SSA Countries, Controlling for GNI per Capita 7 O.6 Rich-Poor Gaps in Education and Health Are Largest in SSA Resource-Rich Countries: Differences between the Richest and Poorest Quintiles on Outcome Indicators 9 O.7 Increased Public Spending Is Not Associated with Improved Outcomes in Oil-Rich Countries: Association between Public Spending and Outcomes, Controlling for Other Factors
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