Revisiting the Resource Curse: Natural Disasters, the Price of Oil, and Democracy

TitleRevisiting the Resource Curse: Natural Disasters, the Price of Oil, and Democracy
Publication TypeJournal Article
Year of Publication2011
AuthorsRamsay KW
JournalInternational Organization
Pagination - 529
Date PublishedJuly 2011
ISBN Number0020-8183, 0020-8183
KeywordsClimate, Natural Disasters and Their Management, Global Warming (Q54), Democracy, Economic Development: Agriculture, Natural Resources, Energy, Environment, Other Primary Products (O13), Energy: Demand and Supply, Prices (Q41), Formal and Informal Sectors, Shadow Economy, Institutional Arrangements (O17), Institution, Natural Disaster, Natural Resources and Domestic and International Conflicts (Q34), Oil, Oil Price, Political, Political Institution, Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior (D72), Resources, Selected Countries
AbstractFluctuations in the price of oil and the contemporaneous political changes in oil-producing countries have raised an important question about the link between oil rents, political institutions, and civil liberties. This article presents a simple model of the relationship between resource income and political freedom and, using an instrumental variables approach, estimates the causal effect of shocks to oil revenues on levels of democracy. Using a new data set, multiple measures of democracy, and various specifications, I find that the effect of oil price shocks is larger than might be expected and on the order of the effects found from changes in gross domestic product.