Gene

Ecology

Bayesian probability

Biology

Statistics

Microeconomics

Panel data

Robustness (evolution)

Economics

Biochemistry

Computer science

Mathematics

Econometrics

Artificial intelligence

Natural resource

Chemistry

Economic rent

Resource curse

Bayesian inference

Energy Economics

The evidence for the effects of oil rents on growth is mixed, a result which can be explained with model uncertainty. We address the issue using Bayesian Model Averaging techniques and an updated cross-country data set for long-term growth in the period 1970–2014, including 91 countries and 54 potential growth determinants. We do not find empirical evidence for the existence of a “natural resource curse” in our sample. On the contrary, our results suggest a robust positive effect of oil rents on long-term economic growth. We then introduce interaction terms of oil rents with potential conditions under which oil dependency can lead to sub-standard growth. The results indicate that the positive effect of oil rents may be conditional on the quality of institutions. We test the robustness of our results using a panel data set and find neither a curse nor a positive effect of oil rents on short- to medium-run growth.

The resource curse revisited: A Bayesian model averaging approach