Watson Events

Benjamin Smith -- Measuring the Resource Curse: Revisiting Oil Wealth and Political Stability

"Measuring the Resource Curse: Revisiting Oil Wealth and Political Stability," with Benjamin Smith, Associate Professor of Political Science, University of Florida.

The last decade has seen the study of the “resource curse” grow from a niche question to a major research agenda with multiple outcomes of interest—regime type, regime stability, civil conflict and economic growth to take a few. However, the proliferation of different measurement choices without careful consideration of their fit with current concepts and theories has hamstrung the potential for real knowledge accumulation. In this essay I review the two main theorized mechanisms linking fuel wealth and politics—weak institutions and rent patronage—and suggest focusing on just the latter. I also outline the bases for and problems with current measures. The essay then presents a new measure—rent leverage—to capture the share of individuals’ relative buying power that accrues directly from fuel rents. This measure is both conceptually closer to current theory and in accord with current best practices in development economics. Initial analysis of cross-national data from 1960 to 2009 suggests no systematic relationship between fuel wealth and regime stability, regardless of how stability is measured. This in turn suggests that prior measures may have been strongly biasing results against developing countries by failing to account for purchasing power parity effects.

Location: McKinney Conference Room, Watson Institute, 111 Thayer Street.