Skip to main content
    • Aa
    • Aa

Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse


A large body of scholarship finds a negative relationship between natural resources and democracy. Extant cross-country regressions, however, assume random effects and are run on panel datasets with relatively short time dimensions. Because natural resource reliance is not an exogenous variable, this is not an effective strategy for uncovering causal relationships. Numerous sources of bias may be driving the results, the most serious of which is omitted variable bias induced by unobserved country-specific and time-invariant heterogeneity. To address these problems, we develop unique historical datasets, employ time-series centric techniques, and operationalize explicitly specified counterfactuals. We test to see if there is a long-run relationship between resource reliance and regime type within countries over time, both on a country-by-country basis and across several different panels. We find that increases in resource reliance are not associated with authoritarianism. In fact, in many specifications we generate results that suggest a resource blessing.

Corresponding author
Stephen Haber is A.A. and Jeanne Welch Milligan Professor of Political Science and Peter and Helen Bing Senior Fellow, Hoover Institution, Stanford University, 434 Galvez Mall, Stanford, CA 94305 (
Victor Menaldo is Assistant Professor of Political Science, University of Washington, 101 Gowen Hall, Seattle, WA 98105 (
Hide All
Acemoglu Daron, Johnson Simon, Robinson James, and Yared Pierre. 2008. “Income and Democracy.” American Economic Review 98: 808–42.
Aslaksen Silje. 2010. “Oil and Democracy: More than a Cross-country Correlation?Journal of Peace Research 47 (4): 421–31.
Bun Maurice, and Wendmeijer Frank. 2010. “The Weak Instrument Problem of the System GMM Estimator in Dynamic Panel Data Models.” Econometrics Journal 13 (1): 95126.
Cutler David, Deaton Angus, and Lleras-Muney Adriana. 2006. “The Determinants of Mortality.” Journal of Economic Perspectives 20 (3): 97120.
David Paul, and Wright Gavin. 1997. “Increasing Returns and the Genesis of American Resource Abundance.” Industrial and Corporate Change 6 (2): 203–45.
DeBoef Suzanna, and Keele Luke. 2008. “Taking Time Seriously.” American Journal of Political Science 52 (1): 184200.
Dunning Thad. 2008. Crude Democracy: Natural Resource Wealth and Political Regimes. New York: Cambridge University Press.
Engle Robert, and Granger Clive. 1987. “Cointegration and Error Correction: Representation, Estimation and Testing.” Econometrica 55 (2): 251–76.
Friedman Thomas. 2006. “The First Law of Petropolitics.” Foreign Policy 154: 2836.
Gasiorowski Mark. 1995. “Economic Crisis and Political Regime Change: An Event History Analysis.” American Political Science Review 89 (December): 882–97.
Gleditsch Kristian, and Ward Michael D.. 2006. “Diffusion and the International Context of Democratization.” International Organization 60 (4): 911–33.
Goldberg Ellis, Wibbels Eric, and Myukiyehe Eric. 2008. “Lessons from Strange Cases: Democracy, Development, and the Resource Curse in the U.S. States.” Comparative Political Studies 41: 477514.
Granger Clive, and Newbold Phillip. 1974. “Spurious Regressions in Econometrics.” Journal of Econometrics 2: 111–20.
Haber Stephen, Razo Armando, and Maurer Noel. 2003. The Politics of Property Rights: Political Instability, Credible Commitments, and Economic Growth in Mexico, 1876–1929. Cambridge: Cambridge University Press.
Hamilton Kirk, and Clemens Michael. 1999. “Genuine Savings Rates in Developing Countries.” World Bank Economic Review 13: 333–56.
Herb Michael. 2005. “No Representation without Taxation? Rents, Development, and Democracy.” Comparative Politics 37: 297317.
Huntington Samuel. 1991. The Third Wave: Democratization in the Late Twentieth Century. Norman: University of Oklahoma Press.
Jaggers Keith, and Gurr Ted. 1995. “Tracking Democracy's Third Wave with the Polity III Data.” Journal of Peace Research 32: 469–82.
Jensen Nathan, and Wantchekon Leonard. 2004. “Resource Wealth and Political Regimes in Africa.” Comparative Political Studies 37: 816–41.
Kanioura Athina, and Turner Paul. 2005. “Critical Values for an F-test for Cointegration in a Multivariate Model.” Applied Economics 37: 265–70.
Kittel Bernhard, and Winner Hannes. 2005. “How Reliable Is Pooled Analysis in Political Economy?European Journal of Political Research 44: 269–93.
Levin Andrew, Lin Chien-Fu, and Chu Chia-Shang James. 2002. “Unit Root Tests in Panel Data: Asymptotic and Finite-sample Properties.” Journal of Econometrics 108: 124.
Lipset Seymour Martin. 1959. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” American Political Science Review 53: 69105.
Luciani Giacomo. 1987. “Allocation versus Production States: A Theoretical Framework.” In The Rentier State, ed. Beblawi Hazem and Luciani Giacomo. New York: Croom Helm.
Maddala G. S., and Wu Shaowen. 1999. “A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test.” Oxford Bulletin of Economics and Statistics Special Issue: 631–52.
Mahdavy Hussein. 1970. “The Patterns and Problems of Economic Development in Rentier States: The Case of Iran.” In Studies in the Economic History of the Middle East, ed. Cook M. A.. London: Oxford University Press.
Manzano Osmel, and Monaldi Francisco. 2008. “The Political Economy of Oil Production in Latin America.” Economía 9 (1): 5998.
Marshall Monty, and Jaggers Keith. 2008. “Polity IV Project: Political Regime Characteristics and Transitions, 1800–2006.” University of Maryland. Unpublished manuscript.
Norman Catherine. 2009. “Rule of Law and the Resource Curse: Abundance versus Intensity.” Environmental and Resource Economics 43: 183207.
Papaioannou Elias, and Siourounis Gregorios. 2008. “Economic and Social Factors Driving the Third Wave of Democratization.” Journal of Comparative Economics 36: 365–87.
Przeworski Adam, Alvarez Michael, Cheibub José Antonio, and Limongi Fernando. 2000. Democracy and Development. New York: Cambridge University Press.
Ramsay Kristopher. N.d. “Revisiting the Resource Curse: Natural Disasters, the Price of Oil, and Democracy.” International Organization. Forthcoming.
Ross Michael. 2001. “Does Oil Hinder Democracy?World Politics 53: 325–61.
Ross Michael. 2009. “Oil and Democracy Revisited.” University of California–Los Angeles. Mimeo.
Smith Benjamin. 2007. Hard Times in the Land of Plenty: Oil Politics in Iran and Indonesia. Ithaca, NY: Cornell University Press.
Soares Rodrigo. 2007. “On the Determinants of Mortality Reductions in the Developing World.” Population and Development Review 33 (2): 247–87.
Wantchekon Leonard. 2002. “Why Do Resource Dependent Countries Have Authoritarian Governments?Journal of African Finance and Economic Development 2: 5777.
Westerlund Joakim. 2007. “Testing for Error Correction in Panel DataOxford Bulletin of Economics and Statistics 69 (6): 709–48.
Wooldridge Jeffrey. 2006. Introductory Econometrics: A Modern Approach. Mason, OH: Thompson South-Western.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
Type Description Title
Supplementary Materials

Haber and Menaldo supplementary materials

 PDF (1.8 MB)
1.8 MB


Altmetric attention score

Full text views

Total number of HTML views: 107
Total number of PDF views: 1444 *
Loading metrics...

Abstract views

Total abstract views: 2779 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 19th October 2017. This data will be updated every 24 hours.