Essays on circular economy, shadow economy, political stability

The management of natural resource rents (NRRs) poses significant challenges to the economic development of a country. It can lead to a 'resource blessing' or, conversely, a 'resource curse' particularly in the presence of a shadow economy (SE), where economic activities are poorly regulated and/or unrecorded by the government. Consequently, institutional quality (IQ) critically influences the outcomes of an effective management of NRR on development trajectories. The value added of the first article is the investigation of the combined effects of NRR and IQ on SE across country groups globally. Main findings reveal how NRR contributes to lowering SE in high-income countries (HICs), upper-middle-income countries (UMICs), and lower-middle-income countries (LMICs). However, increases in NRR in low-income countries (LICs) lead to increases in SE, with and without the moderation of IQ, thus validating the 'resource curse' hypothesis. Additionally, with the moderation of IQ, NRR significantly reduces SE across countries, except for LMICs and LICs. In addition, Natural resource rent (NRR) is the center of our living and economic development, yet it poses significant environmental threats. Preventing environmental degradation is undoubtedly vital for sustainable development. The circular economy (CE) can resolve the dilemma at this critical juncture. Therefore, the second article aims to investigate the dynamics between natural resource rent (NRR), CE, and environmental sustainability (ENS) to identify effective pathways for achieving sustainable development. It establishes three fundamental pillars: (1) efficient use of NRR, (2) sustainable production and consumption through CE, and (3) securing ENS to achieve UN's Sustainable Development Goals -8, 12 & 13 (SDGs 8, 12 & 13). The research underscores a trinity solution, emphasizing the interplay between NRR, CE, and ENS for sustainable development. The findings demonstrate that while direct extraction of NRR harms ENS, integrating NRR into CE practices significantly mitigates these adverse effects and promotes ENS. Our research provides valuable insights for policymakers and recommends the 'active' economic policy to achieve sustainable development through enhancing ENS. Furthermore, Political stability (PS) is a cornerstone of economic development, yet the role of the shadow economy (SE) in determining PS remains unexplored in literature. The third article addresses this significant gap by examining how shadow and formal economies (FE) influence PS across 124 countries from 1996 to 2018. The findings reveal that while the SE significantly undermines PS, the FE plays a vital role in enhancing PS. These results offer valuable insights for policymakers, emphasizing the importance of minimizing SE activities as a means to ensure PS and promote sustainable economic development.