Analysis of the Moderating Role of Governance in the Relationship between Natural Resource Abundance and Economic Growth of OIC Countries
Keywords:
Natural Resource Abundance, Economic Growth, Governance
Abstract
This study aims to analyze the influence of natural resource abundance on economic growth by positioning governance as a moderating variable in 25 member countries of the Organization of Islamic Cooperation (OIC) during the period 2008-2021. Using a quantitative explanatory approach with a Fixed Effects (FEM) panel data regression model, this study examines how the dimensions of the Worldwide Governance Indicators (WGI) interact with Natural Resource Rents. Empirical results indicate that natural resource abundance has a positive and significant effect on economic growth. However, this effect is not a simple linear one and is highly dependent on the quality of governance. Of the six WGI indicators, three dimensions proved to be significant moderators: Voice and Accountability, Political Stability, and Control of Corruption. In contrast, formal administrative aspects such as government effectiveness, regulatory quality, and the rule of law did not show a statistically strong moderating role. These findings emphasize the importance of strengthening institutional morale, accountability, and political stability as absolute prerequisites for transforming a potential resource curse into a resource blessing in the Islamic world.
References
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Siddiqi, M. N. (1996). Role of the state in the economy: An Islamic perspective. The Islamic Foundation.
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Sugiyono. (2019). Quantitative research methods. ALFABETA.
Sukoco, AB (2022). Heteroscedasticity in simple linear regression. Journal of Econometric Analysis, 1(2), 45-52.
Suliyanto. (2011). Applied Economics: Theory and Application with SPSS. CV. Andi Offset.
Syahra, NA, Riyanti, & Astrid, A. (2025). The economic theories of Thomas Robert Malthus, David Ricardo, and Baptiste Say and their relevance in Indonesia. Kalamizu: Journal of Science, Social, and Religious Studies, 1(1), 48–60.
Tabash, M.I., Mesagan, E., & Farooq, U. (2022). Dynamic linkage between natural resources, economic complexity, and growth in Africa. Resources Policy, 79, 103063.
Taufiq, M., Melidiana, M., Sasmita, JE, Bintani, L., Karunia, A., Malik, A., & Delvi, NP (2025). Review of income distribution inequality in economic and Islamic perspectives in modern economics. Journal of Management and Business Economics Research, 4(2), 143–157.
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Torvik, R. (2009). Why do some resource-abundant countries succeed while others fail? Oxford Review of Economic Policy, 25(2), 241–256.
Venables, A. J. (2016). Using natural resources for development. Journal of Economic Perspectives, 30(1), 161–184.
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Yulianti, AV (2020). The economic theories of David Ricardo, Thomas Malthus, and Jean Baptiste Say. Angewandte Chemie International Edition, 6(11), 5–24.
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Al-Ghazali. (1993). Al-Mustasfa min 'ilm al-usul (Vol. 1). Dar al-Kutub al-Ilmiyah.
Al-Kasasbeh, M., et al. (2022). The impact of e-government on corruption: Evidence from OIC countries. Journal of Islamic Accounting and Business Research, 13(4), 621–638.
Al-Maududi, AA (2011). First principles of Islamic economics. The Islamic Foundation.
Arikunto, S. (2013). Research procedures: A practical approach. Rineka Cipta.
Askari, H., Iqbal, Z., & Mirakhor, A. (2012). Economic development in Islamic countries: Progress, problems, and prospects. Edward Elgar Publishing.
Asongu, S. A. (2024). The role of governance and infrastructure in moderating the effect of resource rents on economic growth. Journal of Economic Structures, 13(1), 5–20.
Auty, R. M. (1990). Resource-based industrialization: Sowing the oil in eight developing countries. Clarendon Press.
Auty, R. M. (1993). Sustaining development in mineral economies: The resource curse thesis. Routledge.
Auty, R. M. (2001). Sustaining development in mineral economies: The resource curse thesis. Routledge.
Basuki, AT (2021). Panel data analysis in economic and business research. Danisa Media.
Belloumi, M., & Almashyakhi, A. A. (2025). Impact of natural resource rents and governance on economic growth in major MENA oil-producing countries. Energies, 18(8), 2066.
Boediono. (2019). Economic growth theory. BPFE.
Chapra, M. U. (1992). Islam and the economic challenge. The Islamic Foundation.
Chapra, M. U. (2000). The future of economics: An Islamic perspective. The Islamic Foundation.
Corden, W. M., & Neary, J. P. (1982). Booming sectors and de-industrialization in a small open economy. The Economic Journal, 92(368), 825–848.
Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches. SAGE Publications.
Dwi Yunianto. (2021). Analysis of population growth and density on economic growth. Economic Forum, 23(4), 687–698.
EITI International. (2023). The EITI standard 2023: The global standard for the good governance of oil, gas and mineral resources. EITI International Secretariat.
Elsani, D., Fitrialis, R., Cahyono, R., Aldiansyah, YF, & Fitriana, N. (2024). Analysis of the dynamics of the 3-sector economy in the context of regional economic growth. Indonesian Journal of Accounting, Business and Economics, 3(2), 10–20.
Erum, N., & Hussain, S. (2019). Corruption, natural resources and economic growth: Evidence from OIC countries. Resources Policy, 63, 101429.
Farooq, U., Tabash, MI, & Al-Faryan, MAS (2025). Natural resources and economic growth in Asia: The moderating role of governance. Journal Pre-proof Natural, 101890.
Gelb, A., & Ross, M. (2010). PRSP process and resource-rich countries. World Bank Policy Research Working Paper.
Ghozali, I. (2021). Multivariate analysis application with IBM SPSS program. Diponegoro University Publishing Agency.
Gylfason, T. (2001). Natural resources, education, and economic development. European Economic Review, 45(4-6), 847–859.
Hartono, J. (2018). Data collection methods and analysis techniques. Andi Offset.
Hassan, MK, et al. (2019). Governance and economic growth in Islamic banking and finance. Journal of King Abdulaziz University: Islamic Economics, 32(2), 15–32.
Hermawan, I. (2019). Educational research methodology. Hidayatul Quran.
Hordofa, TT, Kassie, GW, & Getahun, BE (2021). Natural resource abundance and economic growth in Africa: The role of institutional quality. Journal of Economic Structures, 10(1), 1–19.
IEA. (2023). World energy outlook 2023. International Energy Agency.
Islahi, AA (2006). Good governance in Islam: A conceptual framework. Islamic Research and Training Institute (IRTI).
J. Guo. (2023). Natural resource abundance, institutional quality, and economic growth: A global evidence. Environmental Science and Pollution Research, 30(2), 156–172.
Janie, DNA (2012). Descriptive statistics & multiple linear regression with SPSS. Semarang University Press.
Jelanti, D. (2020). The effect of profitability ratios, free cash flow, and leverage on earnings management. Jurnal Madani: Ilmu Pengetahuan, Teknologi, dan Humaniora, 3(2), 289–303.
Kahf, M. (1987). The Islamic economy: Analytical of the functioning of the Islamic economic system. IRTI.
Karl, T. L. (1997). The paradox of plenty: Oil booms and petro-states. University of California Press.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues. The World Bank.
Kerner, S. (2023). Institutional quality as a mitigating factor of the resource curse. International Economics and Economic Policy, 20(1), 89–110.
Liana, W., et al. (2024). Economic growth theory (Comprehensive theory and its development). Sonpedia Publishing Indonesia.
M. Fahim Khan. (2013). Islamic economics and finance: A review essay. IRTI.
Maharani, K., & Isnowati, S. (2014). A study of investment, government spending, labor and economic openness towards economic growth in Central Java Province. Journal of Business and Economics, 21(1), 62–72.
Mehlum, H., Moene, K., & Torvik, R. (2006). Institutions and the resource curse. The Economic Journal, 116(508), 1–20.
Mirakhor, A., & Askari, H. (2010). Islam and the path to human and economic development. Palgrave Macmillan.
Muhammad Nursan, A. (2025). Textbook of panel data regression analysis with the EViews application. Pustaka Bangsa.
Naqvi, S.N.H. (1994). Perspectives on economic development: Lifestyle, welfare and ethics. PIDE.
Narh, J. (2023). The resource curse and the role of institutions revisited. Environment, Development and Sustainability, 27(4), 8187–8207.
Natural Resources Governance Institute (NRGI). (2021). The resource curse: The political and economic challenges of natural resource wealth. NRGI Policy Brief.
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.
Republic of Indonesia, Ministry of Religion. (2005). The Qur'an and its translation. CV Darus Sunnah.
Sachs, J. D., & Warner, A. M. (1995). Natural resource abundance and economic growth. National Bureau of Economic Research.
Sachs, J. D., & Warner, A. M. (2001). The curse of natural resources. European Economic Review, 45(4–6), 827–838.
Sadaoui, Y., & Ben Jebli, M. (2024). The interaction between natural resources, governance, and sustainable growth in emerging economies. Resources Policy, 88, 210–225.
Salim, E. (2017). Sustainable development and natural resource management. LP3ES.
SESRIC. (2018). Natural resource dependence and economic development in OIC member states 2018. SESRIC Report.
Shihab, MQ (2002). Tafsir Al-Misbah: Messages, impressions, and harmony of the Qur'an (Vol. 14). Lentera Hati.
Siddiqi, M. N. (1996). Role of the state in the economy: An Islamic perspective. The Islamic Foundation.
Sihabuddin. (2021). Basic econometrics theory and practice based on SPSS. CV. Pena Persada.
Sihabuddin, Wibowo, D., Mulyono, S., Kusuma, JW, Saputra, E., Arofah, I., Ningsi, BA, & Purwasih, SR (2021). Basic econometrics: SPSS-based theory and practice. CV. Pena Persada.
Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94.
Statistics, National Bureau of. (2024). Nigerian GDP Report Q2 2024. NBS Report.
Stevens, P., Lahn, G., & Kelsall, T. (2015). The resource curse: A modern reassessment. Chatham House.
Sugiyono. (2017). Quantitative, qualitative, and R&D research methods. ALPABETA.
Sugiyono. (2019). Quantitative, qualitative, and R&D research methods. ALFABETA.
Sugiyono. (2019). Quantitative research methods. ALFABETA.
Sukoco, AB (2022). Heteroscedasticity in simple linear regression. Journal of Econometric Analysis, 1(2), 45-52.
Suliyanto. (2011). Applied Economics: Theory and Application with SPSS. CV. Andi Offset.
Syahra, NA, Riyanti, & Astrid, A. (2025). The economic theories of Thomas Robert Malthus, David Ricardo, and Baptiste Say and their relevance in Indonesia. Kalamizu: Journal of Science, Social, and Religious Studies, 1(1), 48–60.
Tabash, M.I., Mesagan, E., & Farooq, U. (2022). Dynamic linkage between natural resources, economic complexity, and growth in Africa. Resources Policy, 79, 103063.
Taufiq, M., Melidiana, M., Sasmita, JE, Bintani, L., Karunia, A., Malik, A., & Delvi, NP (2025). Review of income distribution inequality in economic and Islamic perspectives in modern economics. Journal of Management and Business Economics Research, 4(2), 143–157.
Todaro, MP, & Smith, SC (2018). Economic development in the third world. Erlangga.
Todaro, M. P., & Smith, S. C. (2020). Economic development (13th ed.). Pearson.
Torvik, R. (2009). Why do some resource-abundant countries succeed while others fail? Oxford Review of Economic Policy, 25(2), 241–256.
Venables, A. J. (2016). Using natural resources for development. Journal of Economic Perspectives, 30(1), 161–184.
Widarjono, A. (2018). Econometrics: Introduction and Applications with EViews Guide. UPP STIM YKPN.
Yanke, A., Zendrato, NE, & Soleh, AM (2022). Handling multicollinearity problems in Indonesia's economic regression modeling based on endogenous economic theory. Indonesian Journal of Statistics and Its Applications, 6(2), 228–244.
Yulianti, AV (2020). The economic theories of David Ricardo, Thomas Malthus, and Jean Baptiste Say. Angewandte Chemie International Edition, 6(11), 5–24.
Yusuf, MN (2025). Macroeconomics textbook (Vol. 1). Indonesian Brilliant House Association.
Published
2026-07-04
How to Cite
Annisa. (2026). Analysis of the Moderating Role of Governance in the Relationship between Natural Resource Abundance and Economic Growth of OIC Countries. International Journal of Economics, Business and Innovation Research, 5(04), 3182-3200. https://doi.org/10.63922/ijebir.v5i04.4298
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