Date of Award

8-2016

Access Control

Open Access

Degree Name

Applied Economics, M.A.

Department

Economics and Finance Department

Advisor

Frederick G Floss

First Reader

Theodore F Byrley

Second Reader

Ted Schmidt

Third Reader

Frederick G Floss

Abstract

The contributions of education in achieving the modernization of developed countries has attracted much attention. Perhaps, underdeveloped countries have provided a limited contribution toward economic development and growth because educational funding was not a priority. Therefore, some underdeveloped countries, including the Democratic Republic of Congo, rely heavily on their natural resources for economic development and growth, minimizing the importance of high quality education in economic growth.

The question is: Why has the Democratic Republic of Congo not been able to transform its abundant resources into a blessing for a prosperous nation? And how does education contribute to economic growth and development in these types of economies? The impact of labor productivity, trade, technology, health, and income are important factors in any policy structure. Therefore, this work will be concerned with the production of human capital, which involves expenditures on formal and informal education to understand problems with low economic growth and how to deal with them in the Democratic Republic of Congo.

Many developing countries savings rates are too low despite their abundant natural resources. Because the Democratic Republic of Congo (DRC) is unable to increase its savings, it does not permit the country to achieve a targeted economic growth and stability rate. Foreign aid was provided in order to relieve the savings constraint and increase investments, thus leading to economic growth. However, the country is still keeping the status quo rate of growth and was ranked second to last in 2014 in the world on the United Nations Development Programs (UNDP), Human Development Index. It has been ranked similarly for a number of years. The DRC has difficulty achieving the sustainable economic growth. We arrive to conclude that even with its abundant natural resources; it cannot achieve sustainable economic development without substantial investment in human capital.

My objective is to analyze if mineral endowments have, in fact, negatively impacted the historical long-run growth and development of mineral-rich countries such as the Democratic Republic of Congo. In order to reach this goal, this paper will examine the effects of some of the most important microeconomic variables such as education, natural resources, GDP, as well as, import and export in order to determine the impact of natural resources on the resource –rich countries.

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