The Transmission of Oil Revenues on the Economic Growth of Iran: A Resource Curse Perspective

Resource curse hypothesis is one of the most complex theories, which is based on Popper's fictitious science methodology in economics and economists designed different models to test this hypothesis. But the contradictory experiences in different countries did not prevent the hypothesis from becoming a law and even a theory. The purpose of this study was to evaluate the effects of oil revenues channels on Iran's economic growth during 1979-1959 using the Sakhs and Warner model. The results showed that oil revenues alone are not detrimental to economic growth and have a direct positive effect on Iran's economic growth. But when according to Sachs and Warner's proposed model, other explanatory variables such as physical investment, the degree of openness of the economy, the relationship of exchange and human capital are introduced into the channels of influence, due to the effect of oil revenues onthese variables and then the indirect negative impact on economic growth, The effect oftotal oil revenues on growth is sharply reduced and much less than the initial value. The result also showed that the increase ofphysical investment, the degree of openness of the economy and the promotion of human capital, has a positive effect and increasing the exchange relationship has a negative effect on Iran's economic growth. In addition, the significance andtype of effect of each channel on economic growth was determined and it was observed that except for the human capital channel, the indirect effect of oil revenues on Iran's economic growth from each channel was negative.