Article
Resource Curse and Power Balance: Evidence from Oil-Rich Countries
forthcoming in World Development
(2012)
Abstract
We examine the role of political fractionalization in understanding the “resource curse”. Using panel data for 30 oil-rich countries, we find that the income effect of resource rents is moderated by the political power balance. With a strong government, resource wealth can generate growth even in an environment of poorly developed institutions, while adding oil revenues to a weak government may have damaging effects on the economy. These results have important implications for the economic prospects of the oil-rich countries in the Middle East, which are currently undergoing profound political changes.
Keywords
- oil rents,
- balance of power,
- natural resource curse,
- panel data
Disciplines
Publication Date
2012
Citation Information
Kjetil Bjorvatn, Mohammad Reza Farzanegan and Friedrich Schneider. "Resource Curse and Power Balance: Evidence from Oil-Rich Countries" forthcoming in World Development (2012) Available at: http://works.bepress.com/mr_farzanegan/12/