Gold, Terrorism, and Economic Growth in Burkina Faso: Between Resource Blessing, Resource Curse Hypothesis, and the Resource–Security Paradox

This paper examines the relationship among gold production, terrorist attacks, FDI, trade openness, financial assistance, World Bank aid, and economic growth in Burkina Faso over the period of 1975–2024. To account for structural shifts and nonlinear dynamics, the analysis employs the FBARDL model together with Fourier Granger causality tests. To check the robustness of the results, the FBARDL estimates were compared with those obtained from the conventional ARDL, ARDL with structural break dummies, and OLS models. In addition, the BDS and Fourier-NL tests were performed on the residuals to assess neglected nonlinear dynamics and remaining structural breaks, while the Fourier F test was employed to verify the significance of the Fourier approximation. Finally, the Fourier Granger causality test was re-estimated using alternative lag lengths to confirm the robustness of the causality. The empirical results revealed contrasting effects of gold production and terrorism on economic growth in Burkina Faso. Gold production exerts a positive and economically meaningful effect in both the long and short run: a 1% increase in gold production increases economic growth by approximately 0.894% in the long run and 0.56% in the short run. By contrast, terrorism significantly undermined long-run economic growth, with a 1% increase in terrorist activity reducing economic growth by approximately 0.45%. The causality analysis further identified unidirectional causality from gold production to terrorism and trade openness, from trade openness and FDI to terrorism, and from terrorism to IBRD/IDA assistance. Bidirectional causality is found between FDI and trade openness, economic growth and FDI, economic growth and terrorism, FDI and gold production, economic growth and trade openness, and trade openness and financial assistance. Taken together, these results revealed a resource–security paradox. Gold production generates a clear resource blessing effect in terms of economic growth, but terrorism indicated that resource expansion may simultaneously intensify conflict-related vulnerabilities. Moreover, the growth benefits generated by gold production do not necessarily translate into broader and more inclusive development. The results therefore suggest that resource blessing in economic growth can coexist with resource curse dynamics in economic development. The policy implications emphasize strengthening resource governance and security institutions while channeling mining revenues toward productive investment and inclusive development. Such measures are essential for transforming gold-driven growth into sustainable development while mitigating the security risks associated with resource dependence. The results therefore revealed a sustainability paradox in which resource wealth generates economic benefits but also increases security and development vulnerabilities. The policy implications emphasized strengthening resource governance and security institutions and improving the allocation of mining revenues toward productive investment and inclusive development. Such policies are essential for transforming gold wealth into sustainable economic development while limiting the conflict-related risks associated with resource dependence.