Oil Rent; Peaceful or Violent?

Document Type : Research Paper

Authors

1 Assistants Professor, Department of Economics, Payame Noor University, Tehran, Iran

2 P.H.D in public sector Economics

Abstract

The rent resulting from the sale of oil and its allocation to social welfare, security and also strengthening the capacity of the government can help to improve the level of peace in a country (buying peace through oil rent). On the other hand, oil rent may lead to the weakening of social security, the creation of conflicts and a high degree of militarization through various channels, which results in an increase in violence in societies. Based on this, the main purpose of this article is to investigate the effect of oil rent on peace level in oil exporting countries during the period of 2010-2020. For this purpose, by using the theoretical literature and using the threshold panel method, the factors affecting the global peace index (GPI) have been modeled along with the oil rent. The results show that the effect of oil rent on the peace index is non-linear and in the form of a U-inverted relationship. The threshold value of oil rent is also estimated at 36% of GDP. In other words, before the threshold level, the share of oil rent in GDP had a positive and significant effect on the peace index; But after crossing this threshold level, the share of oil rent in GDP has a negative and significant effect on the peace index in the studied countries. Based on other results, per capita income, degree of economic openness, life expectancy and democracy have a positive and significant effect on the level peace in oil exporting countries.

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Main Subjects


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