Oil Wealth and Policical (In)stability: Is it really the rents?

Abstract

Researchers at the Political Instability Task Force (PITF) recently published an article identifying regime type, infant mortality rates, level of state led discrimination and the stability of bordering states as best measures for predicting the onset of political instability. None of the additional variables tested were significant and improved the model‟s forecasting ability. Additional variables included natural resource dependence of a state. This measure was constructed using ratios of export revenues based on crude oil, petroleum, ores and metals. The purpose of this research paper is to test an alternative means of measuring resource dependency by focusing directly on the relationship between oil rents and political instability. As such, an „oil rent per capita‟ variable was created and tested alongside the PITF‟s variables. A conditional-regression analysis revealed a significant negative relationship between oil rents and political stability. However, the new measure did not improve the overall forecasting ability of the model. Notable findings also include an increase in odds of conflict in partially democratic states that exhibit factionalism. Several theoretical and methodological reasons for these findings are presented.