Oil countries: What kind of capitalism?

Martin Paldam and Jamel Saadaoui

MPRA Paper from University Library of Munich, Germany

Abstract: The paper considers 18 OPEC countries that were low-income countries when oil was found. Oil has given the countries a special path to high income. Normally wealth leads to democracy, but in oil countries it leads to a consolidation of the previous authoritarian rule. Thus, in most cases, oil wealth leads to a conservative political and economic system. Especially the six oil countries on the Arab Peninsula have conservative socio-cultural values, and they are staunchly authoritarian. However, this does not mean that OPEC countries are oriented toward free market policies. They score poorly on legal quality and protection of property rights and consequently, they have some corruption. This gives centralized economic systems dominated by the ruling group. It is a capitalist system, but it is a special oil type of political capitalism.

Keywords: Oil; Capitalism; OPEC. (search for similar items in EconPapers)
JEL-codes: P16 P26 P28 (search for similar items in EconPapers)
Date: 2025-03-28
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:124277

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