IDEAS home Printed from https://ideas.repec.org/p/mar/magkse/201727.html
   My bibliography  Save this paper

Natural resource rents, autocracy and the composition of government spending

Author

Listed:
  • Morten Endrikat

    () (RWTH Aachen University)

Abstract

This paper empirically analyzes the influence of rents from natural resources on the composition of government spending and investigates whether the relationship differs between democracies and autocracies. Both panel data and instrumental variable regressions suggest that there is a negative joint effect of autocracy and natural resource dependency on education spending. Moreover, there is slight evidence in the results of a positive joint effect on spending for social protection, while other components of government spending do not seem to be influenced. In particular, the results do not suggest that autocratic regimes in resource-dependent countries spend relatively more on military.

Suggested Citation

  • Morten Endrikat, 2017. "Natural resource rents, autocracy and the composition of government spending," MAGKS Papers on Economics 201727, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201727
    as

    Download full text from publisher

    File URL: https://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2017/27-2017_endrikat.pdf
    File Function: First 201727
    Download Restriction: no

    References listed on IDEAS

    as
    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    2. Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
    3. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), pages 570-615.
    4. Kotera, Go & Okada, Keisuke, 2015. "How Does Democratization Affect the Composition of Government Expenditure?," MPRA Paper 67085, University Library of Munich, Germany.
    5. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    6. Mare Sarr & Katharina Wick, 2010. "Resources, conflict and development choices: public good provision in resource rich economies," Economics of Governance, Springer, vol. 11(2), pages 183-205, April.
    7. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    8. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    9. Yu, Bingxin & Fan, Shenggen & Saurkar, Anuja, 2009. "Does Composition of Government Spending Matter to Economic Growth?," 2009 Conference, August 16-22, 2009, Beijing, China 51684, International Association of Agricultural Economists.
    10. Frankel, Jeffrey A., 2012. "The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions," Scholarly Articles 8694932, Harvard Kennedy School of Government.
    11. Sambit Bhattacharyya & Paul Collier, 2014. "Public capital in resource rich economies: is there a curse?," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 1-24, January.
    12. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1167-1199.
    13. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    14. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
    15. Paul Collier & Anke Hoeffler, 2005. "Resource Rents, Governance, and Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 625-633, August.
    16. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    17. Ramsay, Kristopher W., 2011. "Revisiting the Resource Curse: Natural Disasters, the Price of Oil, and Democracy," International Organization, Cambridge University Press, vol. 65(03), pages 507-529, July.
    18. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2014. "Democracy Does Cause Growth," NBER Working Papers 20004, National Bureau of Economic Research, Inc.
    19. Filipe R. Campante & Davin Chor, 2012. "Why Was the Arab World Poised for Revolution? Schooling, Economic Opportunities, and the Arab Spring," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 167-188, Spring.
    20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    21. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    22. repec:cup:apsrev:v:53:y:1959:i:01:p:69-105_00 is not listed on IDEAS
    23. Toke Aidt & Peter Jensen, 2013. "Democratization and the size of government: evidence from the long 19th century," Public Choice, Springer, vol. 157(3), pages 511-542, December.
    24. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    25. Plumper, Thomas & Martin, Christian W, 2003. "Democracy, Government Spending, and Economic Growth: A Political-Economic Explanation of the Barro-Effect," Public Choice, Springer, vol. 117(1-2), pages 27-50, October.
    26. Profeta, Paola & Puglisi, Riccardo & Scabrosetti, Simona, 2013. "Does democracy affect taxation and government spending? Evidence from developing countries," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 684-718.
    27. van der Ploeg, Frederick, 2006. "Challenges and Opportunities for Resource Rich Economies," CEPR Discussion Papers 5688, C.E.P.R. Discussion Papers.
    28. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: natural resources and public spending on health," IOB Working Papers 2014.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
    29. Hannum, Emily & Buchmann, Claudia, 2005. "Global Educational Expansion and Socio-Economic Development: An Assessment of Findings from the Social Sciences," World Development, Elsevier, vol. 33(3), pages 333-354, March.
    30. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, vol. 33(7), pages 1029-1044, July.
    31. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
    32. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    33. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    34. Norman Gemmell & Richard Kneller & Ismael Sanz, 2016. "Does the Composition of Government Expenditure Matter for Long-Run GDP Levels?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(4), pages 522-547, August.
    35. Sanz, Ismael & Velazquez, Francisco J., 2007. "The role of ageing in the growth of government and social welfare spending in the OECD," European Journal of Political Economy, Elsevier, vol. 23(4), pages 917-931, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Natural Resources; resource curse; institutions; government spending;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mar:magkse:201727. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernd Hayo). General contact details of provider: http://edirc.repec.org/data/vamarde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.