Cursed Resources? Political Conditions and Oil Market Outcomes

Gilbert E. Metcalf, Catherine Wolfram
2015 Energy Journal  
We analyze how a country's political institutions affect oil production within its borders. We find a pronounced negative relationship between political openness and volatility in oil production, with democratic regimes exhibiting less volatility than more autocratic regimes. This relationship holds across a number of robustness checks including using different measures of political conditions, instrumenting for political conditions and using several measures of production volatility. Political
more » ... openness also affects other oil market outcomes, including total production as a share of reserves. Our findings have implications both for interpreting the role of institutions in explaining differences in macroeconomic development and for understanding world oil markets.
doi:10.5547/01956574.36.3.gmet fatcat:wc5tbwfucrawbm5uafdqti455e