Journal
WORLD DEVELOPMENT
Volume 40, Issue 7, Pages 1308-1316Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.worlddev.2012.03.003
Keywords
oil rents; balance of power; resource curse
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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. (C) 2012 Elsevier Ltd. All rights reserved.
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