Resource curse and institutional quality in oil countries

Mohsen Mehrara, Mohsen and Alhosseini, Seyedmohammadsadegh and Bahramirad, Duman (2008): Resource curse and institutional quality in oil countries.

Abstract

The examination of the relationship between oil resources and economic growth reveals that oil curse in oil countries is not reliable and these countries can be divided into countries with poor and rich institutions. In the first group, oil revenues have a negative and significant effect on the economic growth; in the second group, oil revenues have a positive and significant effect on economic growth. In other words, what causes curse or blessing of oil resources is the institution qualities of the countries; the lower the institution quality, the more negative effect of the oil revenues on the economic growth. In this article we derive the kink point of institutional index whereby oil revenues effect on the economic growth changes from positive to negative.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic growth, institutions, oil resources
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O50 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q30 - General

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