Exploring the nexus between natural resources, environmental pollution, external conflicts, financial stability and human development: Evidence from OECD nations

The abundance of natural resources is commonly regarded as a dual-faceted phenomenon, possessing the capacity to either hinder or facilitate the achievement of sustainable human development goals. Moreover, climate change and external conflicts pose severe threats to human development. Hence, this empirical research probes the nexus between natural resources, environmental pollution, financial stability, and human development in the era of conflicts. To do so, this study employed second-generation estimation methods that produce reliable results in the presence of heterogeneity and cross-sectional dependence by using the data from OECD countries from 1990 to 2020. The empirical results indicate that abundant natural resources impede human development, which validates the resource curse hypothesis. Environmental degradation is negatively and significantly related to human development while controlling external conflict helps foster human development. The results further indicate that financial stability promotes sustainable development by supporting human development. Drawing upon these findings, policies aimed at fostering sustainable natural resource utilization, mitigating environmental pollution, and minimizing external conflicts are undertaken to advance human development.