Служба спасения студентов
Служба спасения для студентов (18+)

Democracy, Income Inequality and the Resource Curse: Investigation of Causality

Стоимость
2550 руб.
Содержание
Теория
Объем
42 лист.
Год написания

Описание работы

Работа пользователя Vseznayka1995
Добрый день! Уважаемые студенты, Вашему вниманию представляется дипломная работа на тему: «Democracy, Income Inequality and the Resource Curse: Investigation of Causality»
Оригинальность работы 90%

Contents

1Introduction3
2Chapter 1. Theory6

2.1Classical Political Resource Curse . . . . . . . . . . . . . . . . . . . . . . . .6

2.2Reinvention of the Theory  . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

2.3New Approaches  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

2.4Inequality  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

2.5Theoretical Mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
3Chapter 2. Data and Methodology15

3.1Dependent Variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

3.2Independent Variables  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

3.3Control Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

3.4Preliminary Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

3.5Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18


3.5.1Imputation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18


3.5.2Instrumental Variable  . . . . . . . . . . . . . . . . . . . . . . . . . .18


3.5.3  Interaction variable . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
4Chapter 3. Results20

4.1General Model  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

4.2Model with Interaction Variable . . . . . . . . . . . . . . . . . . . . . . . . .20

4.3Model of First Difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

4.4Robustness Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24


4.4.1  Nonlinearity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25


4.4.2Influential Observations  . . . . . . . . . . . . . . . . . . . . . . . . .25


4.4.3VDem-Polyarchy  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5Discussion and Conclusion27
References
30
6Appendix 136
7Appendix 237
8Appendix 339
9Appendix 440
10Appendix 540
 
  1. Introduction
It has been almost two decades since Ross’s classical work that introduced the resource curse into political science and made the political resource curse a mainstream (Ross 2001). Nevertheless, we still have much ambiguity and lacunas as to why resource endowment is so bad for institutional development and democratization.
Historically, resources were considered a blessing, the most important being fertile land and gold. In the 19 century, energy as an industry has substantially advanced and coal became a foundation of every economy. And later we have seen petroleum take its place as a basis for the energy industry, trade, and most of the goods. A transition to oil that was so eloquently described in the quoted book “Carbon democracy” (Mitchell 2011) had a critical effect on politics. Modern democracy could not be possible without technological advances in the field of energy. Thus, expectedly it has been considered a blessing for oil-rich countries for a long time. Not to mention, metals and mineral resources were considered to be a godsend. However, petroleum had adverse consequences as well. According to Ross, petroleum was not a predicament until the 1970s when the oil prices spiked. The resource curse is not traced until then. After that, oil dependence became an important factor of low economic growth, a lack of diversified economy, a higher chance of civil conflict, and failure of democratization. Alike, comparative studies of new states in Africa have made minerals bad reputation (Jensen and Wantchekon 2004; Ross 2013; Wantchekon 2002).
Nevertheless, initial thought on the hazardous consequences of resource abundance was later reconsidered. Many authors have stated that the resource curse is a more complicated phenomenon that is conditioned by the institutional environment (De Ferranti et al. 2002; Haber and Menaldo 2011; Wright and Czelusta 2004). They have declared that natural-resource wealth is not hazardous per se and, in fact, different resources are different in their political outcomes. While some claim that the resource curse theory is valid, but negative effects of it are alleviated by good institutions. The presence of institutions of high-quality can mitigate the rent-seeking, grabbing behavior of politicians, reduce corruption, which are the main reasons for the resource curse, according to the traditional theory. Stable democ-racies are observed to not experience the curse in most cases (Canada, Norway). Moreover, empirical studies have sometimes had contrasting inferences that depend on the research design (methods, operationalization, and empirical base). Some conclude that resources are an important determinant of democratic breakdown (Jensen and Wantchekon 2004; Ramsay 2011; Ross 2001), and others indicate that either authoritarianism leads to resource depen-dence (Gurses 2009; Haber 2008; Haber and Menaldo 2011) or there is no real connection (Claessens and Laeven 2003; Herb 2005; Wright and Czelusta 2004). Hence, the problem of this research is the absence of a strict consensus on the issue of the direction of the causal
 
3
 
relationship between the political regime and resource dependence in political science.
To address the issue of the institutional environment and employ a social factor that may moderate the relationship and determine how the resource curse happens, I include in my theoretical mechanism the phenomenon of inequality. I presuppose that dominating inequality (in the thesis I focus on income inequality in particular) should affect how resource rents are redistributed among people and such redistribution affects the probability that petro-elites are able to concentrate political power and reverse democratic processes.1 In the thesis, I answer the following puzzle question: what is the type of the causal relationship between the political regime and resource dependence in the circumstances of high- and low-income inequality? The goal of my research is to uncover the direction and type of the relationship. I use the relationship between the political regime and resource dependence in countries of high- and low-income inequality as the subject of the work.
Considering the existing literature, I suggest that the curse does exist, but is dependent on the institutional environment. Economic relations expressed in the income inequality affect the relationship. Low-inequality-type countries are able to escape the resource curse via the redistribution of resource boons. I formulate several hypotheses that are going to be tested in the course of the research.
H1: The type of the relationship between the political regime and resource dependence varies across low- and high-inequality countries.
H1.1: The effect of resource dependence is negative in high-inequality countries.
H1.2: Resource dependence does not have a significant effect in low-inequality countries.
H2: The political regime does not influence resource dependence.
To illustrate the hypotheses I present causal graph 1. A more elaborate explanation is expressed in the following chapters.
Political Regime

Income Inequality

Resource Dependence

Resource Abundance
Figure 1: Causal Graph
I fulfill several tasks to succeed in the goal of the research.
1. For more details see Chapter 2 paragraph 2.5
 
4
 
  1. To propose an underlying theoretical explanation for the causal mechanism;
  1. To prove that resource dependence is exogenous to the political regime, using the instrumental variable (IV) method;
  1. To estimate the relationship between the political regime and resource dependence in countries with low and high inequality.
I exploit an extensive sample of 190 countries and 39 years. It has observations with contrasting resource dependence, regime, and inequality types. The data includes socio-economic characteristics as well as information about resource wealth.
This paper has a relatively novel approach by including inequality as a moderating com-ponent and trying to reveal the causal mechanism with statistical methods. I employ the instrumental variable method (2SLS) to address the confounding problem (presence of con-founder may cause spurious relationship between the outcome and covariate; as I am applying causal inference approach it is essential to eliminate it). The IV method was used before in the context of economic, but not the political resource curse. Furthermore, I moderate the connection with the income-inequality type. The moderator allows me to estimate the inter-action effect of two independent variables, which serves to test my hypotheses. The reason why the endogeneity problem remains such an issue is that most research uses observational data (Ross 2015) and experimental methods are cumbersome to use in this topic. That is why my design can enable science to progress in this direction.
In the first chapter, I analyze existing theoretical frameworks on the political resource curse, juxtapose them, and suggest own approach, which includes inequality as a third factor, and enables to work in terms of causal inference. Then I discuss the methods and data I exploit. I provide empirical analysis in the third chapter. Finally, I discuss the results and make conclusions.
 
References
Acemoglu, Daron, Simon Johnson, James A Robinson, and Pierre Yared. 2008. “Income and Democracy.” American Economic Review 98 (3): 808–842.
Acemoglu, Daron, Suresh Naidu, Pascual Restrepo, and James A Robinson. 2015. “Democ-racy, Redistribution, and Inequality.” In Handbook of Income Distribution, 2:1885–1966. Elsevier.
Acemoglu, Daron, and James A Robinson. 2000. “Political Losers as a Barrier to Economic Development.” American Economic Review 90 (2): 126–130.
  • 2001. “A Theory of Political Transitions.” American Economic Review 91 (4): 938– 963.
  • 2006. “Economic Backwardness in Political Perspective.” American Political Science Review 100 (1): 115–131.
Alexeev, Michael, and Robert Conrad. 2005. The Elusive Curse of Oil. Technical report. San Working Paper.
Alvarez, Mike, José Antonio Cheibub, Fernando Limongi, and Adam Przeworski. 1996. “Clas-sifying Political Regimes.” Studies In Comparative International Development 31 (2): 3–
  1. doi:10.1007/BF02719326.
Andersen, Jørgen J, and Michael L Ross. 2014. “The Big Oil Change: A Closer Look at the
Haber–Menaldo Analysis.” Comparative Political Studies 47 (7): 993–1021.
Aslaksen, Silje, and Ragnar Torvik. 2006. “A Theory of Civil Conflict and Democracy in Rentier States.” Scandinavian Journal of Economics 108 (4): 571–585.
Auty, Richard. 2001. Resource Abundance and Economic Development. Oxford University Press.
Aytaç, S Erdem, Michael Mousseau, and Ömer Faruk Örsün. 2016. “Why Some Countries are Immune from the Resource curse: The Role of Economic Norms.” Democratization 23 (1): 71–92.
Beck, Nathaniel, and Jonathan N Katz. 1995. “What to do (and not to do) with Time-Series Cross-Section Data,” 89:634–647. 3. doi:10.2307/2082979.
Boix, Carles. 2003. Democracy and Redistribution. 253. Cambridge University Press.
Borge, Lars-Erik, Pernille Parmer, and Ragnar Torvik. 2015. “Local Natural Resource Curse?” Journal of Public Economics 131:101–114.
 
30
 
Bound, John, David A Jaeger, and Regina M Baker. 1995. “Problems with Instrumental Variables Estimation when the Correlation between the Instruments and the Endoge-nous Explanatory Variable is Weak.” Journal of the American Statistical Association 90 (430): 443–450.
Brooks, Sarah M, and Marcus J Kurtz. 2016. “Oil and Democracy: Endogenous Natural Resources and the Political Resource Curse.” International Organization 70 (2): 279– 311.
Brückner, Markus, Antonio Ciccone, and Andrea Tesei. 2012. “Oil Price Shocks, Income, and Democracy.” Review of Economics and Statistics 94 (2): 389–399.
Caselli, Francesco, and Guy Michaels. 2013. “Do Oil Windfalls Improve Living Standards? Evidence from Brazil.” American Economic Journal: Applied Economics 5 (1): 208–38.
Chamberlain, Gary, and Guido Imbens. 2004. “Random Effects Estimators with Many In-strumental Variables.” Econometrica 72 (1): 295–306.
Claessens, Stijn, and Luc Laeven. 2003. “Financial Development, Property Rights, and Growth.” The Journal of Finance 58 (6): 2401–2436.
Collier, David, and Steven Levitsky. 1997. “Democracy with Adjectives: Conceptual Innova-
tion in Comparative Research.” World politics 49 (3): 430–451.
Collier, Paul, and Anke Hoeffler. 2004. “Greed and Grievance in Civil War.” Oxford economic papers 56 (4): 563–595.
Coppedge, Michael, John Gerring, David Altman, Michael Bernhard, Steven Fish, Allen Hicken, Matthew Kroenig, Staffan I Lindberg, Kelly McMann, Pamela Paxton, et al. 2011. “Conceptualizing and measuring democracy: A new approach.” Perspectives on Politics 9 (2): 247–267.
De Ferranti, David, Guillermo E Perry, Daniel Lederman, and William E Maloney. 2002. From Natural Resources to the Knowledge Economy: Trade and Job Quality. The World Bank.
Dunning, Thad. 2010. “Endogenous Oil Rents.” Comparative Political Studies 43 (3): 379– 410.
Egorov, Georgy, Sergei Guriev, and Konstantin Sonin. 2009. “Why Resource-poor Dicta-tors Allow Freer Media: A Theory and Evidence from Panel Data.” American Political Science Review 103 (4): 645–668. doi:10.1017/S0003055409990219.
EIA, U.S. Energy Information Administration. 2020. Crude Oil—Time Series Annual. doi:h ttps://doi.org/10.3886/ICPSR00137.v1. https://catalog.data.gov/dataset/
international-energy-statistics.
 
31
 
Fish, Steven. 2002. “Islam and Authoritarianism.” World politics 55 (1): 4–37.
  • 2006. “Stronger Legislatures, Stronger Democracies.” Journal of Democracy 17 (1): 5–20.
Gurses, Mehmet. 2009. “State-Sponsored Development, Oil, and Democratization.” Democ-ratization 16 (3): 508–529.
  • 2011. “Elites, Oil, and Democratization: A Survival Analysis.” Social science quar-terly 92 (1): 164–184.
Gylfason, Thorvaldur, and Gylfi Zoega. 2003. “Inequality and Economic Growth: Do Natural
Resources Matter?” Inequality and growth: Theory and policy implications 1:255.
Haber, Stephen. 2008. “Authoritarian Government.” In The Oxford Handbook of Political Economy. doi:10.1093/oxfordhb/9780199548477.003.0038.
Haber, Stephen, Noel Maurer, and Armando Razo. 2003. “When the Law does not Matter: The Rise and Decline of the Mexican Oil Industry.” The Journal of Economic History 63 (1): 1–32.
Haber, Stephen, and Victor Menaldo. 2011. “Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse.” American political science Review 105 (1): 1–26.
Hainmueller, Jens, Jonathan Mummolo, and Yiqing Xu. 2019. “How Much Should We Trust Estimates from Multiplicative Interaction Models? Simple Tools to Improve Empirical Practice.” Political Analysis 27 (2): 163–192.
Havranek, Tomas, Roman Horvath, and Ayaz Zeynalov. 2016. “Natural Resources and Eco-nomic Growth: A Meta-Analysis.” World Development 88:134–151.
Herb, Michael. 2005. “No Representation without Taxation? Rents, Development, and Democ-racy.” Comparative Politics: 297–316.
Honaker, James, Gary King, Matthew Blackwell, et al. 2011. “Amelia II: A Program for
Missing Data.” Journal of Statistical Software 45 (7): 1–47.
Huntington, Samuel P. 1993. The Third Wave: Democratization in the Late Twentieth Cen-tury. Vol. 4. University of Oklahoma press.
Jensen, Nathan, and Leonard Wantchekon. 2004. “Resource Wealth and Political Regimes in Africa.” Comparative political studies 37 (7): 816–841.
Karl, Terry Lynn. 1997. The Paradox of Plenty: Oil Booms and Petro-States. Vol. 26. Uni-versity of California Press.
 
32
 
Kirat, Djamel, and Nicolas Clootens. 2018. Threshold Regressions for the Resource Curse. Technical report. Orleans Economics Laboratory / Laboratoire d’Economie d’Orleans (LEO), University of Orleans.
Kurtz, Marcus J, and Sarah M Brooks. 2011. “Conditioning the Resource Curse: Globaliza-tion, Human Capital, and Growth in Oil-Rich Nations.” Comparative Political Studies 44 (6): 747–770.
Linz, Juan J. 1990. “The Perils of Presidentialism.” Journal of Democracy 1 (1): 51–69.
Lipset, Seymour Martin. 1959. “Some Social Requisites of Democracy: Economic Develop-
ment and Political Legitimacy.” American Political Science Review 53 (1): 69–105.
Lizzeri, Alessandro, and Nicola Persico. 2001. “The Provision of Public Goods under Alter-native Electoral Incentives.” American Economic Review 91 (1): 225–239.
Luciani, Giacomo. 1987. The Rentier State. Edited by Hazem Beblawi. Croom Helm.
Mahdavy, Hossein, and M Cook. 1970. “The Patterns and Problems of Economic Develop-ment in Rentier States: the Case of Iran.” life 1000 (1).
Maloney, William F. 2002. Missed Opportunities: Innovation and Resource-Based Growth in Latin America. The World Bank.
Mehlum, Halvor, Karl Moene, and Ragnar Torvik. 2006. “Institutions and the Resource Curse.” The economic journal 116 (508): 1–20.
Mitchell, Timothy. 2011. Carbon Democracy: Political Power in the Age of Oil. Verso Books.
Mulligan, Casey B, and Kevin K Tsui. 2008. Political Entry, Public Policies, and the Econ-omy. Technical report. National Bureau of Economic Research.
Oakleaf, James R, Christina M Kennedy, Sharon Baruch-Mordo, Paul C West, James S Gerber, Larissa Jarvis, and Joseph Kiesecker. 2015. “A World at Risk: Aggregating Development Trends to Forecast Global Habitat Conversion.” PloS one 10 (10).
Parcero, Osiris J, and Elissaios Papyrakis. 2016. “Income Inequality and the Oil Resource Curse.” Resource and Energy Economics 45:159–177.
Perry, Guillermo, and Mauricio Olivera. 2009. Natural Resources, Institutions and Economic Performance. Technical report November.
Przeworski, Adam. 1991. Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America. Cambridge University Press.
R Core Team. 2020. R: A Language and Environment for Statistical Computing. Vienna,
Austria: R Foundation for Statistical Computing. https://www.R-project.org/.
 
33

Ramsay, Kristopher W. 2011. “Revisiting the Resource Curse: Natural Disasters, the Price
of Oil, and Democracy.” International Organization 65 (3): 507–529.
Robinson, James A, Ragnar Torvik, and Thierry Verdier. 2006. “Political Foundations of the Resource Curse.” Journal of Development Economics 79 (2): 447–468.
Rosenberg, Dina, and Georgy Tarasenko. 2020. “Innovation for Despots? How Dictators and Democratic Leaders Differ in Stifling Innovation and Misusing Natural Resources across 114 Countries.” Energy Research & Social Science 68:1–12.
Ross, Michael. 1999. “The Political Economy of the Resource Curse.” World politics 51 (2):
297–322.
. 2001. “Does Oil Hinder Democracy?” World Politics, 53 (3): 325–361.
  • 2003. “Natural Resources and Civil War: An Overview.” World bank research ob-server: 1–37.
  • 2007. “How Mineral-Rich States Can Reduce Inequality.” Escaping the Resource Curse 23775:237–55.
. 2009. “Oil and Democracy Revisited.”
  • 2013. The oil curse: How petroleum wealth shapes the development of nations. Prince-ton University Press.
  • 2015. “What Have We Learned about the Resource Curse?” Annual Review of Po-litical Science 18:239–259.
  • 2016. “The Politics of the Resource Curse: A Review.” The Oxford Handbook of the Politics of Development.
Rubin, Donald B. 1987. Statistical Analysis with Missing Data. Wiley.
Sachs, Jeffrey, and Andrew Warner. 1995. Natural Resource Abundance and Economic Growth.
Technical report. National Bureau of Economic Research.
Stijns, Jean-Philippe. 2003. “An Empirical Test of the Dutch Disease Hypothesis Using a Gravity Model of Trade.” Available at SSRN: https://ssrn.com/abstract=403041.
Suutarinen, Tuomas Kristian. 2015. “Local Natural Resource Curse and Sustainable Socio-Economic Development in a Russian Mining Community of Kovdor.” Fennia-International Journal of Geography 193 (1): 99–116.

Сколько стоит помощь с учебной работой?