Oil, governance and the (mis)allocation of talent in developing countries

Christian Hubert Ebeke (), Luc Omgba and Rachid Laajaj

Journal of Development Economics, 2015, vol. 114, issue C, 126-141

Abstract: This paper sheds light on the relationship between oil rent and the allocation of talent, toward rent-seeking versus more productive activities, conditional on the quality of institutions. Using a sample of 69 developing countries, we demonstrate that oil resources orient university students toward specializations that provide better future access to rents when institutions are weak. The results are robust to various specifications, datasets on governance quality and estimation methods. Oil affects the demand for each profession through a technological effect, indicating complementarity between oil and engineering, manufacturing and construction; however, it also increases the ‘size of the cake’. Therefore, when institutions are weak, oil increases the incentive to opt for professions with better access to rents (law, business, and the social sciences), rather than careers in engineering, creating a deviation from the optimal allocation between the two types of specialization.

Keywords: Oil rent; Governance; Rent-seeking; Tertiary education (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (66)

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Related works:
Working Paper: Oil, governance and the (mis)allocation of talent in developing countries (2015)
Working Paper: Oil, governance and the (mis)allocation of talent in developing countries (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:114:y:2015:i:c:p:126-141

DOI: 10.1016/j.jdeveco.2014.12.004

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