Publication:
Growth and resource curse in oil-rich OIC countries: the role of institutions and financial development
Abstract
There has been considerable research providing evidence of a negative link between natural resource abundance and economic growth leading to the coining of the term 'resource curse' (Yuxiang & Chen, 2009; Anshasy & Katsaiti, 2011). The member states of the Islamic Cooperation Countries (OIC) comprise 57 countries, including those that are resource rich. Given that oil exports revenue has been the main resource contributor, it is expected that continuous increase in fuel prices over the past decade would have positioned the OIC countries at the forefront of economic performance and growth. This research undertakes a review on ten of the Islamic Cooperation Countries (OIC) (‘the OIC Countries’) and assesses whether sustainable growth in economic performance is demonstrated from the discovery of their tradable resources. On this premise, the study evaluates whether the resource curse symptom exists and determines whether natural resource abundance in the OIC countries is a curse or a blessing. Using the Fixed Effect method, the analysis firstly explores whether there is negative relation between oil resources or rent and real GDP to prove the presence of a resource curse. The research also evaluates potential mechanism that account for the resource curse such as quality of institutions and financial development. The study ultimately attempts to provide policy recommendations on how the OIC countries could benefit more from their resource wealth by adopting welfare enhancing reforms of their policies and institutions according to the framework envisioned by the Qur’an.
Keywords
Economic development , Financial institutions , Islamic finance , Islamic countries
Citation
Mohd Mydin, N. (2016). Growth and resource curse in oil-rich OIC countries: the role of institutions and financial development (Doctoral dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/2419
Publisher
INCEIF
Available in physical copy only (Call Number: t HD 82 N974)