Politická ekonomie X:X | DOI: 10.18267/j.polek.1463

Does Mineral Resources Utilization and Governance Policy Induce Income Inequality: Contextual Findings from Historical Data of China

Xiaoyi Ren ORCID..., Chen Wang ORCID..., László Vasa ORCID...
Xiaoyi Ren: School of Mathematics and Statistics, Fujian Normal University, Fuzhou, PR China
Chen Wang: School of Marxism, Anhui University, Hefei, PR China
László Vasa: Széchenyi Istvàn University, Faculty of Economics, Hungary

In the current literature strand, most of the literature is devoted to the role played by mineral and governance policies in environmental quality. However, their criticality in income inequality is mainly overlooked by scholarly works. This research investigated the nexus of mineral and governance policies with income inequality while exploring the importance of per capita income, health expenditure, and poverty. Covering the extended period from 1984Q1 to 20223Q4 in the case of China, this research confirms the presence of long-run equilibrium association between variables. Due to the non-normal data distribution, this research uses quantile regression and a series of robust non-parametric and parametric approaches. The research concludes that mineral resources, health expenditure, governance efficiency, regulatory quality, and poverty headcounts significantly reduce income inequality. Wealth from mineral and health expenditures substantially improves the living standards of the general public. The governance policies are also beneficial in equal wealth distribution of the country. On the contrary, per capita income and government stability are the region’s leading factors of income inequality. Based on the predicted results, this research recommends improved minerals management, strengthening of governance institutions and policies, and enhancement in health expenditure to tackle the issue of income inequality.

Keywords: Income inequality; mineral resources; governance policies; income; poverty; health expenditure; quantile regression.

Received: August 16, 2024; Revised: September 3, 2024; Accepted: September 23, 2024; Prepublished online: October 15, 2024 

Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Acheampong, A.O., Adebayo, T.S., Dzator, J. and Koomson, I. (2023). Income inequality and economic growth in BRICS: insights from non-parametric techniques. The Journal of Economic Inequality, 21(3), 619-640. https://doi.org/10.1007/s10888-023-09567-9 Go to original source...
    2. Acheampong, A.O., Dzator, J., Abunyewah, M., Erdiaw-Kwasie, M.O. and Opoku, E.E.O. (2023). Sub-Saharan Africa's tragedy: Resource curse, democracy, and income inequality. Social Indicators Research, 168(1), 471-509. https://doi.org/10.1007/s11205-023-03137-2 Go to original source...
    3. Akram, Z., Wajid, S., Mahmood, T., Sarwar, S. (2011). Impact of poor governance and income inequality of poverty in Pakistan. Far East Journal of Psychology and Business, 4(3), 43-55. https://ideas.repec.org/a/fej/articl/v4cy2011i4p43-55.html
    4. Alvarado, R., Tillaguango, B., López-Sánchez, et al. (2021). Heterogeneous impact of natural resources on income inequality: the role of the shadow economy and human capital index. Economic Analysis and Policy, 69, 690-704. https://doi.org/10.1016/j.eap.2021.01.015 Go to original source...
    5. Anyanwu, U. M., Anyanwu, A. A., Cie¶lik, A. (2021). Does abundant natural resources amplify the negative impact of income inequality on economic growth?. Resources Policy, 74, 102229. https://doi.org/10.1016/j.resourpol.2021.102229 Go to original source...
    6. Auten, G., Splinter, D. (2024). Income inequality in the United States: Using tax data to measure long-term trends. Journal of Political Economy, 132(7), 2179-2227. https://doi.org/10.1086/728741 Go to original source...
    7. Avom, D., Ntsame Ovono, N., Ongo Nkoa, E. (2022). Revisiting the effects of natural resources on income inequality in Sub-Saharan Africa. International Journal of Development Issues, 21(3), 389-412, https://doi.org/10.1108/IJDI-02-2022-0036 Go to original source...
    8. Badeeb, R. A., Lean, H. H., Clark, J. (2017). The evolution of the natural resource curse thesis: A critical literature survey. Resources Policy, 51, 123-134. https://doi.org/10.1016/j.resourpol.2016.10.015 Go to original source...
    9. Balani, K., Gaurav, S., Jana, A. (2023). Spending to grow or growing to spend? Relationship between public health expenditure and income of Indian states. SSM-Population Health, 21, 101310. https://doi.org/10.1016/j.ssmph.2022.101310 Go to original source...
    10. Chambers, D., O'Reilly, C. (2022). Regulation and income inequality in the United States. European Journal of Political Economy, 72, 102101, https://doi.org/10.1016/j.ejpoleco.2021.102101 Go to original source...
    11. Cheng, C., Ren, X., Wang, Z. (2019). The impact of renewable energy and innovation on carbon emission: an empirical analysis for OECD countries. Energy Procedia, 158, 3506-3512. https://doi.org/10.1016/j.egypro.2019.01.919 Go to original source...
    12. Cuesta, J., Madrigal, L., Pecorari, N. (2024). Social sustainability, poverty and income: An empirical exploration. Journal of International Development, 36(3), 1789-1816. https://doi.org/10.1002/jid.3882 Go to original source...
    13. Darise, R. I. (2023). The Effect of Economic Growth and Income Inequality on Poverty in Central Sulawesi Province Period 2011-2022. Formosa Journal of Sustainable Research, 2(5), 1331-1342. https://doi.org/10.55927/fjsr.v2i5.4069 Go to original source...
    14. Davis, G. A. (2020). Large-sample evidence of income inequality in resource-rich nations. Mineral Economics, 33(1), 193-216. https://doi.org/10.1007/s13563-019-00207-1 Go to original source...
    15. Dawes, D. E. (2020). The political determinants of health. Baltimore, U.S.A.:Johns Hopkins University Press. ISBN 9781421437897 Go to original source...
    16. Dean, E., Elardo, J., Green, M., Wilson, B., Berger, S. (2020). Principles of Economics: Scarcity and Social Provisioning. https://openoregon.pressbooks.pub/socialprovisioning3/
    17. Dhital, S., Jiang, S., Reese, J. (2023). Effects of monetary and government spending policy on economic inequality. Journal of Macroeconomics, 77, 103547. https://doi.org/10.1016/j.jmacro.2023.103547 Go to original source...
    18. Dossou, T. A. M., Kambaye, E. N., Berhe, M. W., Asongu, S. A. (2023). Moderating effect of ICT on the relationship between governance quality and income inequality in sub-Saharan Africa. Information development, 02666669231170396, https://doi.org/10.1177/02666669231170396 Go to original source...
    19. Elliott, G., Rothenberg, T. J., Stock, J. H. (1992). Efficient Tests for an Autoregressive Unit Root. Econometrica, 64(4), 813-836. https://doi.org/10.3386/t0130 Go to original source...
    20. Fu, R., Liu, J. (2023). Revenue sources of natural resources rents and its impact on sustainable development: evidence from global data. Resources Policy, 80, 103226. https://doi.org/10.1016/j.resourpol.2022.103226 Go to original source...
    21. Gaddam, R., Rao, K. R. (2023). Incidence, inequality, and determinants of catastrophic health expenditure in India. Journal of Health Management, 25(1), 30-39. https://doi.org/10.1177/09720634231153226 Go to original source...
    22. Goenka, A., Liu, L., Pang, H. (2024). Health and income inequality during pandemics. working paper.
    23. Gokhool, S., Tandrayen-Ragoobur, V., Kasseeah, H. (2024). The employment, growth and income inequality link: the economic significance of natural resources for Sub-Saharan Africa. Mineral Economics, 1-20. https://doi.org/10.1007/s13563-024-00450-1 Go to original source...
    24. Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica: Journal of the Econometric Society, 424-438. https://doi.org/10.2307/1912791 Go to original source...
    25. Hanck, C. (2009). A meta analytic approach to testing for panel cointegration. Communications in Statistics-Simulation and Computation, 38(5), 1051-1070. https://doi.org/10.1080/03610910902750039 Go to original source...
    26. Huang, C. J., Ho, Y. H. (2018). The impact of governance on income inequality in ten Asian countries. Journal of Reviews on Global Economics, 7, 217-224. https://doi.org/10.6000/1929-7092.2018.07.20 Go to original source...
    27. Huang, X., Huang, S., Shui, A. (2021). Government spending and intergenerational income mobility: evidence from China. Journal of Economic Behavior & Organization, 191, 387-414. https://doi.org/10.1016/j.jebo.2021.09.005 Go to original source...
    28. Hung, N. T., Yen, N. T. H., Duc, L. D. M., et al. (2020). Relationship between government quality, economic growth and income inequality: Evidence from Vietnam. Cogent Business & Management, 7(1), 1736847. https://doi.org/10.1080/23311975.2020.1736847 Go to original source...
    29. Jianu, I. (2020). The impact of government health and education expenditure on income inequality in the European Union. arXiv preprint arXiv:2007.11409. https://doi.org/10.48550/arXiv.2007.11409 Go to original source...
    30. Khan, H., Weili, L., Khan, I. (2023). The effect of political stability, carbon dioxide emission and economic growth on income inequality: evidence from developing, high income and Belt Road initiative countries. Environmental Science and Pollution Research, 30(3), 6758-6785. https://doi.org/10.1007/s11356-022-22675-9 Go to original source...
    31. Khezrian, M., McNeil, C. J., Murray, A.D., Myint, P. K. (2020). An overview of prevalence, determinants and health outcomes of polypharmacy. Therapeutic advances in drug safety, 11, 2042098620933741. https://doi.org/10.1177/2042098620933741 Go to original source...
    32. Kim, M. K., Bhattacharya, J., Bhattacharya, J. (2024). Is income inequality linked to infectious disease prevalence? A hypothesis-generating study using tuberculosis. Social Science & Medicine, 345, 116639. https://doi.org/10.3386/w31053 Go to original source...
    33. Koenker, R., Bassett Jr, G. (1978). Regression quantiles. Econometrica: Journal of the Econometric Society, 33-50. https://doi.org/10.2307/1913643 Go to original source...
    34. Kunawotor, M. E., Bokpin, G. A., Barnor, C. (2020). Drivers of income inequality in Africa: Does institutional quality matter?. African Development Review, 32(4), 718-729. https://doi.org/10.1111/1467-8268.12473 Go to original source...
    35. Lerner, J., Seru, A., Short, N., Sun, Y. (2024). Financial Innovation in the Twenty-First Century: Evidence from US Patents. Journal of Political Economy, 132(5), 1391-1449. https://doi.org/10.1086/727712 Go to original source...
    36. Lian, C., Pei, J., Li, J. (2024). Income inequality effect of government investment behavior: Comparisons based on different investment areas, different regions and different groups in China. Heliyon, 10(5): e26452. https://doi.org/10.1016/j.heliyon.2024.e26452 Go to original source...
    37. Luo, C., Li, S., Sicular, T. (2020). The long-term evolution of national income inequality and rural poverty in China. China Economic Review, 62, 101465. https://doi.org/10.1016/j.chieco.2020.101465 Go to original source...
    38. Maddala, G. S., Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652. https://doi.org/10.1111/1468-0084.0610s1631 Go to original source...
    39. McLaughlin, P. A., Stanley, L. (2016). Regulation and income inequality: The regressive effects of entry regulations. Mercatus Center at George Mason University. https://www.mercatus.org/students/research/working-papers/regulation-and-income-inequality-regressive-effects-entry
    40. Molero-Simarro, R. (2017). Inequality in China revisited. The effect of functional distribution of income on urban top incomes, the urban-rural gap and the Gini index, 1978-2015, China Economic Review, 42, 101-117. https://doi.org/10.1016/j.chieco.2016.11.006 Go to original source...
    41. Ngoc, B. H., Hai, L. M. (2024). Time-frequency nexus between tourism development, economic growth, human capital, and income inequality in Singapore. Applied Economics Letters, 31(4), 259-264. https://doi.org/10.1080/13504851.2022.2130865 Go to original source...
    42. Ofori I. K, Asongu S. A. (2021). ICT diffusion, foreign direct investment and inclusive growth in sub-Saharan Africa. Telematics and Informatics, 65, 101718. https://doi.org/10.1016/j.tele.2021.101718 Go to original source...
    43. Ofori, I. K., Dossou, T. A. M., Akadiri, S. S. (2023). Towards the quest to reduce income inequality in Africa: is there a synergy between tourism development and governance?. Current Issues in Tourism, 26(3), 429-449. https://doi.org/10.1080/13683500.2021.2021157 Go to original source...
    44. Ponce, P., Yunga, F., Larrea-Silva, J., Aguirre, N. (2023). Spatial determinants of income inequality at the global level: The role of natural resources. Resources Policy, 84, 103783. https://doi.org/10.1016/j.resourpol.2023.103783 Go to original source...
    45. Pop, T. M. (2024). Economic Growth and Income Inequality: The Challenge in Ex-Communist EU Countries. Eastern European Economics, 1-30, https://doi.org/10.1080/00128775.2024.2370350 Go to original source...
    46. Qin, L., Raheem, S., Murshed, M., et al. (2021). Does financial inclusion limit carbon dioxide emissions? Analyzing the role of globalization and renewable electricity output. Sustainable Development, 29(6), 1138-1154. https://doi.org/10.1002/sd.2208 Go to original source...
    47. Rodríguez, F. (2018). Oil, minerals, and power: the political economy of China's quest for resources in Brazil and Peru (Doctoral dissertation, Dissertation, Universität Freiburg, 2018). https://doi.org/10.6094/UNIFR/194748 Go to original source...
    48. Sawadogo, R., Ouoba, Y. (2024). Do natural resource rents reduce income inequality? A finite mixture of regressions approach. Resources Policy, 91, 104870. https://doi.org/10.1016/j.resourpol.2024.104870 Go to original source...
    49. Sebri, M., Dachraoui, H. (2021). Natural resources and income inequality: A meta-analytic review, Resources Policy, 74, 102315. https://doi.org/10.1016/j.resourpol.2021.102315 Go to original source...
    50. Shen, C., Zhao, X. (2023). How does income inequality affects economic growth at different income levels?. Economic research-Ekonomska istraľivanja, 36(1), 864-884. https://doi.org/10.1080/1331677X.2022.2080742 Go to original source...
    51. Sidek, N. Z. M. (2021). Do government expenditure reduce income inequality: evidence from developing and developed countries. Studies in Economics and Finance, 38(2), 447-503. https://doi.org/10.1108/SEF-09-2020-0393 Go to original source...
    52. Sugiharti, L., Purwono, R., Esquivias, M.A., Rohmawati, H. (2023). The nexus between crime rates, poverty, and income inequality: A case study of Indonesia. Economies, 11(2), 62. https://doi.org/10.3390/economies11020062 Go to original source...
    53. Sutanto, H., Harsono, I., Furkan, et al. (2024). Income Inequality and Economic Growth. Economics Studies and Banking Journal (DEMAND), 1(3), 166-175. https://doi.org/10.62207/6ec47y90 Go to original source...
    54. Temerbulatova, Z., Mukhamediyev, B., Zhidebekkyzy, A., Bilan, S. (2024). Regional disparities and dual dynamics: Economic growth and income inequality in Kazakhstan. Economics and Sociology, 17 (2), 241-255. https://doi.org/10.14254/2071-789X. 2024/17-2/12. Go to original source...
    55. Tselios, V. (2023). Does political decentralization affect income inequality? The role of governance quality. Regional Studies, 57(5), 829-843. https://doi.org/10.1080/00343404.2022.2101634 Go to original source...
    56. Ulu, M. I. (2018). The effect of government social spending on income inequality in OECD: A panel data analysis. Uluslararasi Ekonomi Siyaset İnsan ve Toplum Bilimleri Dergisi, 1(3), 184-202. https://mpra.ub.uni-muenchen.de/91104/
    57. Vito, T. (1998). Fundamental Determinants of Inequality and the Role of Government. IMF Working Paper (W.P./98/178). Washington, DC. https://www.imf.org/external/pubs/ft/wp/wp98178.pdf Go to original source...
    58. Wang, K. M., Nguyen Thi, T. B. (2022). Quantile panel-type analysis for income inequality and healthcare expenditure. Economic research-Ekonomska istraľivanja, 35(1), 873-893. https://doi.org/10.1080/1331677X.2021.1948436 Go to original source...
    59. Zhang, J. (2021). A survey on income inequality in China. Journal of Economic Literature, 59(4), 1191-1239. https://doi.org/10.1257/jel.20201495 Go to original source...
    60. Zhang, Q., Brouwer, R. (2020). Is China affected by the resource curse? A critical review of the Chinese literature. Journal of Policy Modeling, 42(1), 133-152. https://doi.org/10.1016/j.jpolmod.2019.06.005 Go to original source...
    61. Zhou, Y., Liu, Y., Niu, J. (2024). Role of mineral-based industrialization in promoting economic growth: Implications for achieving environmental sustainability and social equity. Resources Policy, 88, 104396. https://doi.org/10.1016/j.resourpol.2023.104396 Go to original source...
    62. Zhuang, J., de Dios, E., Martin, A. L. (2010). Governance and institutional quality and the links with economic growth and income inequality: With special reference to developing Asia. Asian Development Bank Economics Working Paper Series, (193). https://doi.org/10.2139/ssrn.1619116 Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return