The Oil Nouveau-Riche and Arms Imports
Countries that strike it rich when exploring for oil and gas often fail to see growth materialize. This paper shows that one way things can get messy is via squandering new wealth, based on future resource revenues, on arms imports. In the five yea...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/302681598970589744/The-Oil-Nouveau-Riche-and-Arms-Imports http://hdl.handle.net/10986/34422 |
| Summary: | Countries that strike it rich when
exploring for oil and gas often fail to see growth
materialize. This paper shows that one way things can get
messy is via squandering new wealth, based on future
resource revenues, on arms imports. In the five years
following a giant oil or gas discovery, arms imports
increase by 25 percent. The effect is even larger, at 51
percent, when the price of oil is as high as $80 per barrel.
These estimates can be interpreted causally as the timing of
giant oil discoveries is unpredictable due to the uncertain
nature of exploration. |
|---|