The Oil Nouveau-Riche and Arms Imports

Pierre-Louis Vézina

Journal of African Economies, 2021, vol. 30, issue 4, 349-369

Abstract: Countries that strike it rich when exploring for oil and gas often fail to see growth materialise. This paper shows that one way things can go awry is via squandering new wealth, based on future resource revenues, on arms imports. Across developing countries, in the 5 years following a giant oil or gas discovery, arms imports increase by 30% on average. This effect only occurs in non-democracies with high levels of corruption, and there is suggestive evidence that it is driven in part by arms imports from China and Russia, and not by imports from other major arms exporters. These estimates can be interpreted causally as the timing of giant oil discoveries is unpredictable due to the uncertain nature of exploration.

Keywords: giant discoveries; arms trade; resource curse; JEL classification: F14; Q33 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1093/jae/ejaa017 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Oil Nouveau-Riche and Arms Imports (2020)
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:oup:jafrec:v:30:y:2021:i:4:p:349-369.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Journal of African Economies is currently edited by Francis Teal

More articles in Journal of African Economies from Centre for the Study of African Economies Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().