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Revisiting the oil curse: are oil rich nations really doomed to autocracy and inequality?

Author

Listed:
  • Schubert, Samuel R.

Abstract

There is an adage about wealth and democracy that says “the more well-to-do a nation, the greater the chances it will sustain democracy.” Accordingly, one would expect that nations rich in natural resources, and particularly those with large deposits of oil – a clear absolute advantage – would shine far beyond all others as beacons of democracy and freedom. Unfortunately, nothing seems further from the truth. Studies undoubtedly show that oil dependence leads to a skewing of political forces. It concentrates production to geographic enclaves and concentrates power into the hands of a few elites. It becomes a fisherman’s market for rent-seeking behavior, where those with money jockey for positions and influence to acquire lucrative contracts, the revenues from which are used to further bribe and manipulate those in power. Consequently, those in power secure the positions of their benefactors, creating a vicious circle of corruption and patronage, secured from open inspection of a free press, public accountability, or standards of international business and political practice. They tend to have stratified social classes with a tiny minority earning millions while a vast portion of the population wallow in abject poverty. How is it possible to be so rich, yet so poor? Is this phenomenon, known as the “oil curse,” or in social science parlance, the “resource curse” truly to blame? Does oil really impede democracy and economic growth? “Revisiting the oil curse: are oil rich nations really doomed to autocracy and inequality?” addresses precisely these questions, and the answers are no less than disturbing.

Suggested Citation

  • Schubert, Samuel R., 2006. "Revisiting the oil curse: are oil rich nations really doomed to autocracy and inequality?," MPRA Paper 10109, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:10109
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    File URL: https://mpra.ub.uni-muenchen.de/10109/1/MPRA_paper_10109.pdf
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    References listed on IDEAS

    as
    1. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
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    Cited by:

    1. Douzounet Mallaye & Gaëlle Tatiana Timba & Urbain Thierry Yogo, 2015. "Oil Rent and Income Inequality in Developing Economies: Are They Friends or Foes?," Working Papers halshs-01100843, HAL.
    2. Gaëlle Tatiana TIMBA & Douzounet MALLAYE & Urbain Thierry YOGO, 2015. "Oil Rent and Income Inequality in Developing Economies: Are They Friends or Foes?," Working Papers 201502, CERDI.
    3. Gissela Landa, 2015. "Transitioning towards a low-carbon economy in Mexico: An application of the ThreeMe model," Sciences Po publications info:hdl:2441/192fcun0f09, Sciences Po.
    4. Saleem, Zahabia & Donaldson, John A., 2016. "Pathways to poverty reduction," LSE Research Online Documents on Economics 67523, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    Resource Curse; Oil Curse; Dutch Disease; Energy Policy; Economic Development Policy;

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F0 - International Economics - - General
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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