Oil Price Shocks, Income, and Democracy

By Markus Brückner, A. Ciccone, Andrea Tesei. Review of Economics and Statistics, 2012

157 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/347a3edb42abd553c3c3794c2c597d9c3ba627e1

How researchers see this paper

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In Economics and Econometrics

1. Sam Jones
2. F. Tarp
3. Brock Smith
4. James Fenske
5. M. Alsan
6. D. Roodman
7. Markus Brückner
8. Sandrina B. Moreira

Citations in the corpus

• Does foreign aid harm political institutions (2015, background): “Furthermore, Brückner et al. (2012) show that the evolution of institutions depends on whether changes to income are permanent or temporary.”
• Resource Windfalls, Political Regimes, and Political Stability (2016, unknown): “Brückner, Ciccone, and Tesei (2012) find a positive coefficient on oil price shocks interacted with the share of net oil exports in GDP in a regression for movements toward democracy.”
• Ecology, trade and states in pre-colonial Africa (2014, background): “The impact may depend on the timing of trade reforms (Giavazzi and Tabellini, 2005) or on the distribution of the gains from trade (Brückner et al., 2012).”
• The Resource Curse Exorcised: Evidence from a Panel of Countries (2015, background): “Bruckner et al (2012) and Caselli and Tesei (2011) both use panel data to estimate the effect of income shocks driven by commodity price fluctuations on democratic institutions in commodity-exporting countries (reaching different conclusions)4.”