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Comparative Economic Studies

, Volume 59, Issue 3, pp 243–260 | Cite as

Exogenous Resource Shocks and Economic Freedom

  • Colin O’Reilly
  • Ryan H. Murphy
Original Article

Abstract

An extensive literature has identified the tendency of natural resource rents to inhibit the development of quality institutions, though few studies have investigated the effects on economic institutions. We use a data set of plausibly exogenous “giant” oil field discoveries as a means of testing whether the presence of large resource rents impacts a country’s economic institutions. We find evidence of short run effects of these discoveries on the size of government spending, but find no evidence of an effect on economic institutions in general. At least for this set of resource discoveries, there is no resource curse for economic institutions.

Keywords

resource curse oil economic freedom economic institutions 

JEL Classification

D72 O13 P10 

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Copyright information

© Association for Comparative Economic Studies 2017

Authors and Affiliations

  1. 1.Creighton UniversityOmahaUSA
  2. 2.Southern Methodist UniversityDallasUSA

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