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More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries

  • Kevin K. Tsui

This article exploits variations in the timing and size of oil discoveries to identify the impact of oil wealth on democracy. I find that discovering 100 billion barrels of oil (approximately the initial endowment of Iraq) pushes a country's democracy level almost 20 percentage points below trend after three decades. The estimated effect is larger for oilfields with higher-quality oil and lower exploration and extraction costs. However, the estimates become less precise when oil abundance is measured by oil discovery per capita, suggesting politicians may care about the level instead of the per capita value of oil wealth.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 121 (2011)
Issue (Month): 551 (March)
Pages: 89-115

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Handle: RePEc:ecj:econjl:v:121:y:2011:i:551:p:89-115
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