The effect of natural resource abundance on economic growth and income distribution: An empirical analysis for Kazakhstan

To effective policy proposals, economists have often investigated whether a natural resource abundance is a curse or a blessing for over half a century. However, it is seen that the researches mostly focus on the natural resource abundance-economic growth relationship, and the income distribution is neglected. In addition, to the best of our knowledge, Kazakhstan, which has important natural resources, has not been directly examined in any study. The aim of this study, which was carried out by moving from the gaps in the literature mentioned above, is to empirically reveals the effect of natural resource abundance on income distribution and economic growth for Kazakhstan. The findings obtained in the study via using the annual data covering the period 1994-2020 and ARDL bound test, which produces robust results under the endogeneity, are as follows: i) While an increase in natural resource abundance, fixed capital formation, and foreign direct investment affects economic growth positively, an increase in the inflation rate affects economic growth negatively. ii) An increase in economic growth and natural resource abundance reduces income inequality. However, an increase in trade openness increases income inequality. iii) The effect of inflation on income distribution is not statistically significant.