Oil, Growth, and Health: What Does the Cross-Country Evidence Really Show?

Scandinavian Journal of Economics, Forthcoming

53 Pages Posted: 16 May 2012

See all articles by Anca Cotet Grecu

Anca Cotet Grecu

Seton Hall University

Kevin K. Tsui

Clemson University - John E. Walker Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2012

Abstract

We show that previous results from the resource curse literature are primarily driven by collapsing in oil prices since the mid-1980s. 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 no evidence that higher oil rents hinder growth. Focusing on material gain, however, understates the welfare gain from oil, because oil-rich countries benefit more in infant-mortality reduction and longevity gain. Interestingly, such oil-led health improvements are more pronounced in nondemocratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites.

Keywords: resource curse, oil discoveries, oil-led health improvements

JEL Classification: O11, O13, O47, Q32

Suggested Citation

Cotet Grecu, Anca and Tsui, Kevin K., Oil, Growth, and Health: What Does the Cross-Country Evidence Really Show? (April 2012). Scandinavian Journal of Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2060337

Anca Cotet Grecu

Seton Hall University ( email )

400 S Orange Avenue
South Orange, NJ 07079
United States

Kevin K. Tsui (Contact Author)

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

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