*This research has been supported by the Property and Environment Research Center (PERC). We especially thank Colin Campbell from the Association for the Study of Peak Oil for providing access to some of the data. We also thank Terry Anderson, Dan Benjamin, Bill Dougan, and seminar participants at Clemson University, Hong Kong University of Science and Technology, University of Maryland, and PERC for helpful comments and discussions. All remaining errors are ours.
Oil, Growth, and Health: What Does the Cross-Country Evidence Really Show?*
Article first published online: 16 SEP 2013
© The editors of The Scandinavian Journal of Economics 2013.
The Scandinavian Journal of Economics
Volume 115, Issue 4, pages 1107–1137, October 2013
How to Cite
Cotet, A. M. and Tsui, K. K. (2013), Oil, Growth, and Health: What Does the Cross-Country Evidence Really Show?. The Scandinavian Journal of Economics, 115: 1107–1137. doi: 10.1111/sjoe.12027
- Issue published online: 16 SEP 2013
- Article first published online: 16 SEP 2013
- Manuscript Accepted: MAY 2012
- Manuscript Received: FEB 2011
- Oil discoveries;
- oil-led health improvements;
- resource curse;
We show that previous results from the body of literature on the resource curse have primarily been driven by the collapse in oil prices during the mid-1980s. By exploiting cross-country variations in the size of initial oil endowments and the timing of oil discoveries, we find that there is a stable positive relationship between oil abundance and long-run economic growth. Using dynamic panel data methods, we also find that there is no evidence that higher oil rents hinder growth. However, to focus on material gain means that the welfare gain from oil is understated, because oil-rich countries benefit more by the reduction in infant mortality and the gain in longevity. Interestingly, such oil-led health improvements are more pronounced in non-democratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites.