Oil Price Shocks, Income, and Democracy

Markus Brückner, Antonio Ciccone and Andrea Tesei

The Review of Economics and Statistics, 2012, vol. 94, issue 2, 389-399

Abstract: We examine the effect of oil price fluctuations on democratic institutions over the 1960–2007 period. We also exploit the very persistent response of income to oil price fluctuations to study the effect of persistent (oil-price-driven) income shocks on democracy. Our results indicate that countries with greater net oil exports over GDP see improvements in democratic institutions following upturns in international oil prices. We estimate that a 1 percentage point increase in per capita GDP growth due to a positive oil price shock increases the Polity democracy score by around 0.2 percentage points on impact and by around 2 percentage points in the long run. The effect on the probability of a democratic transition is around 0.4 percentage points. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: Democracy; Oil Price Shocks; Persistent Income Shocks (search for similar items in EconPapers)
JEL-codes: O10 P16 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (98)

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Related works:
Working Paper: Oil Price Shocks, Income, and Democracy (2013)
Working Paper: Oil Price Shocks, Income, and Democracy (2011)
Working Paper: Oil price shocks, income and democracy (2011)
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