Oil Price Shocks, Income, and Democracy

Date

2012

Authors

Brueckner, Markus
Ciccone, Antonio
Tesei, Andrea

Journal Title

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Volume Title

Publisher

MIT Press

Abstract

We examine the effect of oil price fluctuations on democratic institutions over the 1960–2007 period. We also exploit the very persistent response of income to oil price fluctuations to study the effect of persistent (oil-price-driven) income shocks on democracy. Our results indicate that countries with greater net oil exports over GDP see improvements in democratic institutions following upturns in international oil prices. We estimate that a 1 percentage point increase in per capita GDP growth due to a positive oil price shock increases the Polity democracy score by around 0.2 percentage points on impact and by around 2 percentage points in the long run. The effect on the probability of a democratic transition is around 0.4 percentage points.

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Citation

Source

Review of Economics and Statistics

Type

Journal article

Book Title

Entity type

Access Statement

Open Access

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