Quality of government, oil rents and economic growth in latin american countries
DOI:
https://doi.org/10.26439/ddee2022.n002.5407Keywords:
quality of government, oil rents, economic growthAbstract
This research studies the impact of oil income and economic growth on the quality of government in ten Latin American countries. This analysis uses a panel data model with annual data from the World Bank and the International Country Risk Guide (ICRG). The results showed a significantly negative relationship between oil income and governance quality due to high rent-seeking incentives and corruption, which generates inefficient investment and spending practices. On the other hand, they showed that economic growth has a significantly positive effect on government quality since economic development improves the efficiency and execution of the formal governance mechanism, which generates greater incentives towards public investments for improving the quality of the institutions.
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