Oil rents, governance quality, and the allocation of talents in developing countries
AbstractEvidence shows that the allocation of talented people is not neutral for growth. Thus, a country with a large population of law concentrators tends to develop rent-seeking activities that reduce growth. A country with a large population of engineers tends to foster innovation and strengthen growth. But what determines the allocation of talents? This question has not yet been empirically examined. This paper contributes to fill this gap. Based on a sample of 69 developing countries the paper highlights that oil rents determine the allocation of talents but this effect is not linear. It largely depends on the quality of governance. While, oil rents in well governed countries tend to orient talents towards productive activities, oil rents in badly governed countries tend to orient talents towards rent-seeking activities. These results are robust to different specifications, datasets on governance quality and estimation methods.
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Date of creation: 23 Aug 2011
Date of revision:
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Rent-seeking; occupational choice; oil rents;
Other versions of this item:
- Luc Désiré OMGBA & Christian EBEKE, 2011. "Oil rents, governance quality, and the allocation of talents in developing countries," Working Papers 201123, CERDI.
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-16 (All new papers)
- NEP-DEV-2011-09-16 (Development)
- NEP-ENE-2011-09-16 (Energy Economics)
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