Asymmetric oil price shocks, tax revenues, and the resource curse

Nikita Zakharov

Economics Letters, 2020, vol. 186, issue C

Abstract: The paper proposes an asymmetric relationship between oil rents and institutions such that only positive oil windfalls adversely affect institutional quality, and negative oil windfalls have no impact. We test this theory empirically by studying the dynamics of institutional quality in Russian regions. We find that increases in tax revenues caused by exogenous positive oil price shocks do not change regional income but increase corruption and reduce regional democracy and governance quality; declines in tax revenues from negative oil price shocks do not affect institutional quality but decrease regional income.

Keywords: Oil; Resource curse; Democracy; Corruption; Income; Russia (search for similar items in EconPapers)
JEL-codes: D73 O11 Q32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016517651930240X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s016517651930240x

DOI: 10.1016/j.econlet.2019.06.021

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().