Fata morganas in oil-rich, institution-poor economies
Resources Policy, 2019, vol. 60, issue C, 234-242
Oil-dependent countries suffer from bad institutions. While some believe oil to be the culprit, others have argued that institution-weak economies are poor and resource dependent as a result. This concern previously motivated examinations of resource abundance (e.g., resource production or deposits) that tend to yield different results. But this does not confirm endogeneity bias because resource abundance may not accurately capture the relative importance of natural resources to an economy. In this paper, it is demonstrated that institutional quality is indeed correlated with GDP, and that this fully explains the observed negative relationship between institutional quality and energy dependence. This finding offers broad implications that reach beyond the resource-development literature and speaks generally to the practice of scaling explanatory variables by GDP.
Keywords: Resource Curse; Resource-Dependent Countries; Institutions; Estimation Bias (search for similar items in EconPapers)
JEL-codes: Q3 Q4 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Fata Morganas In Oil-Rich, Institution-Poor Economies (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:60:y:2019:i:c:p:234-242
Access Statistics for this article
Resources Policy is currently edited by R. G. Eggert
More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().