The resource curse revisited: A Bayesian model averaging approach
Kerim Arin () and
Energy Economics, 2018, vol. 70, issue C, 170-178
The evidence for the effects of oil rents on growth is mixed, a result which can be explained with model uncertainty. We address the issue using Bayesian Model Averaging techniques and an updated cross-country data set for long-term growth in the period 1970–2014, including 91 countries and 54 potential growth determinants. We do not find empirical evidence for the existence of a “natural resource curse” in our sample. On the contrary, our results suggest a robust positive effect of oil rents on long-term economic growth. We then introduce interaction terms of oil rents with potential conditions under which oil dependency can lead to sub-standard growth. The results indicate that the positive effect of oil rents may be conditional on the quality of institutions. We test the robustness of our results using a panel data set and find neither a curse nor a positive effect of oil rents on short- to medium-run growth.
Keywords: Oil; Growth; Natural resource curse; Bayesian model averaging (search for similar items in EconPapers)
JEL-codes: Q32 O47 O43 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:70:y:2018:i:c:p:170-178
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