Impact of Oil Resource Rent on Good Governance Indicators of the Oil Exporting Countries

Abstract

Natural resources have an important role in economic development. But aboundance of natural resources have negative effect on Good Governance Indicators. In this study, we have investigated the effect of oil revenues on good governance indicators in 54 oil Exporting countries. The time period of study is 2002 to 2013. For this purpose an econometric panel method and cross-section data has been used. The results indicate that oil resource revenues have significant negative impact on six good governance indicators introduced by the World Bank: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption. Furthermore the variation of openness index, GDP, business freedom index and investment freedom index had a significant positive impact on good governance indicators.

Keywords

• oilrent
• good governance indicators
• panel data