Resource curse and institutional quality in oil countries

Mohsen Mohsen Mehrara, Sadegh Alhosseini and Duman Bahramirad

MPRA Paper from University Library of Munich, Germany

Abstract: The examination of the relationship between oil resources and economic growth reveals that oil curse in oil countries is not reliable and these countries can be divided into countries with poor and rich institutions. In the first group, oil revenues have a negative and significant effect on the economic growth; in the second group, oil revenues have a positive and significant effect on economic growth. In other words, what causes curse or blessing of oil resources is the institution qualities of the countries; the lower the institution quality, the more negative effect of the oil revenues on the economic growth. In this article we derive the kink point of institutional index whereby oil revenues effect on the economic growth changes from positive to negative.

Keywords: economic growth; institutions; oil resources (search for similar items in EconPapers)
JEL-codes: O13 O50 Q30 (search for similar items in EconPapers)
Date: 2008-09, Revised 2009-03
New Economics Papers: this item is included in nep-ara, nep-dev and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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