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

31 Pages Posted: 30 Sep 2013

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: October 2013

Abstract

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.

Keywords: Oil discoveries, oil‐led health improvements, resource curse

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? (October 2013). The Scandinavian Journal of Economics, Vol. 115, Issue 4, pp. 1107-1137, 2013, Available at SSRN: https://ssrn.com/abstract=2332957 or http://dx.doi.org/10.1111/sjoe.12027

Anca Cotet Grecu (Contact Author)

Seton Hall University ( email )

400 S Orange Avenue
South Orange, NJ 07079
United States

Kevin K. Tsui

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

Clemson, SC 29634
United States

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