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Resource curse and institutional quality in oil countries

  • Mohsen Mehrara, Mohsen
  • Alhosseini, Seyedmohammadsadegh
  • Bahramirad, Duman

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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 16456.

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Date of creation: Sep 2008
Date of revision: Mar 2009
Handle: RePEc:pra:mprapa:16456
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