Reassessing the Natural Resource Curse: Effects of Oil Discovery on Democracy

• In Event: Natural Resources and Democracy

Abstract

Natural resources are known to directly impact a country's political fortunes. However, the extant scholarship has provided little clarity on whether these resources strengthen or weaken governance levels. We argue that part of the problem lies with measuring natural resource reliance at the extraction or revenue-generating stage of the resource production process. At this point, the existence and approximate value of a country’s resource wealth has already become common knowledge. In this paper, we will instead use the time-point of discovery of these resource deposits to estimate the resource’s effect on various indicators of authoritarian and democratic governance over time. Using panel data of oil and natural gas field discovery coupled with cross-national and sub-national political outcomes, we argue that such discoveries have a pronounced effect on levels of democracy/autocracy and quality of public services. We posit a theory for how such oil and gas discoveries can change the decision calculus of political leaders and alter institutional structures within a country, even prior to the extraction and sale of those resources. Taken together, we shed light on the political effects of natural resources and provide evidence to re-examine the existing scholarship on said natural resource curse.

Authors

• Harish S.P., College of William & Mary

• Joseph Levine, International Growth Centre and Yale Research Initiative on Innovation and Scale