GRM 2010 GRM 2011

Abstract Details

 
AUTHOR NAME
 
Family Name:
Menaldo
 
First Name:
Victor
 
ABSTRACT OF PAPER
 
Title of Paper:
The Institutions Curse: The Theory and Evidence of Oil in Weak States
 
Paper Proposal Text :
Is there an institutions curse? Drawing on recent findings that challenge the view
that there is a causal relationship running from oil to underdevelopment, I seek to identify what
determines oil exploration and oil extraction rates in the first place. I argue and find that revenue
starved states with low capacity are more likely to launch oil exploration efforts and goose the
production of extant wells. These results hold after controlling for geological endowments, oil
prices, and production costs. It does not matter how the dependent variable is specified; nor if
state capacity is measured as a multidimensional index, a proxy for legal capability, deviations in
foreign reserve holdings, or the state’s antiquity. The results hold across various fixed effects
models, Autoregressive Distributed Lag models, estimated via Structure Generalized Method of
Moments and instrumenting state capacity with relevant lags, or Two-Stage Least Squares that
employ structural inequality as an instrument.
 
 
 

WITH THE GENEROUS SUPPORT OF