Oil, Democracy, and Context

Abstract

A considerable debate precludes drawing conclusions about oil’s effect on democracy. This article challenges this stalemate by significantly expanding the scope of the previous research and using meta-regression analysis to examine the integrated results of extant scholarship. While the results suggest a nontrivial negative association between oil and democracy across the globe, they also indicate a notable variation in this relationship across world regions and institutional contexts. A conditioning effect of institutions may lie more in a broader set of economic and political institutions, less so in previous political regime, but not in institutions associated with British colonial past. Finally, while oil does not seem to impede democracy by retarding two key channels of modernization—income and urbanization—it may have an indirect negative effect on democracy through its adverse impact on education.

The Power of Bias in Economics Research

“…The larger the sample, the greater the statistical power to detect a given genuine effect. 5 Since Cohen (1965), adequate power in most social sciences has been conventionally defined as 80%. That is, the probability of a Type II error should be no larger than four times the probability of the conventional Type I error (0.05).…”

What Have We Learned about the Resource Curse?

“…An extreme bounds analysis identified oil dependence as one of the few robust correlates of regime types (Gassebner et al 2012). A statistical meta-analysis of the oil-democracy question, which integrated the results of 29 studies and 246 empirical estimates, concluded that oil had a negative, nontrivial, and robust effect on democracy (Ahmadov 2014). Prichard et al (2014) revisit this issue, using a new and much-improved cross-national dataset on resource revenues and a wide range of econometric tests; they report that government revenues from natural resources have a large, statistically robust effect on autocratic persistence.…”

Sharing resource wealth for peace: A Chinese strategy to cope with the resource curse

“…However, more recent researches start to analyze the conditioning effects of political institutions on the existence or extent of the resource curse (Ahmadov, 2014;Aslaksen, 2008, 2013;Bhattacharyya and Hodler, 2010;Luong and Weinthal, 2010). Some studies find that the quality of political institutions strongly moderates the impacts of resources on the economy.…”