Resource Curse and Power Balance: Evidence from Oil-Rich Countries

Kjetil Bjorvatn, Mohammad Reza Farzanegan () and Friedrich Schneider ()

World Development, 2012, vol. 40, issue 7, 1308-1316

Abstract: We examine the role of political fractionalization in understanding the “resource curse”. Using panel data for 30 oil-rich countries, we find that the income effect of resource rents is moderated by the political power balance. With a strong government, resource wealth can generate growth even in an environment of poorly developed institutions, while adding oil revenues to a weak government may have damaging effects on the economy. These results have important implications for the economic prospects of the oil-rich countries in the Middle East, which are currently undergoing profound political changes.

Keywords: oil rents; balance of power; resource curse (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (81)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:40:y:2012:i:7:p:1308-1316

DOI: 10.1016/j.worlddev.2012.03.003

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