An Analysis of the Natural Resource Curse in Oil Exporting Countries and the Effect of Being OPEC on the Member's Growth Rate

The The purpose of this article is to analyze the resource curse or the very inverse relation of dependence to natural resources and growth rate in oil exporting countries. To estimate the model, Unbalance Panel Data is used from 1990 to 2004. The explanatory variables in this model include natural resources abundance Index, corruption Index, physical investment, terms of trade, and Education Index. The results show that oil income, as an Index of resource abundance, is individually not harmful on economic growth, i.e. the direct effect of oil income is positive on economic growth. However, when other explanatory variables such as corruption, physical investment, terms of trade, and education are entering the model, the total effect of oil income on economic growth is estimated as negative because of the oil income effect on the variables and then on economic growth. The results, moreover, show that the physical investment increase, terms of trade growth, and education expansion has a positive effect, and corruption Index a negative one on economic growth of oil exporting countries. At the end of the article, the effect of being present in the OPEC on the member's economic growth is analyzed that the results show the negative results of that on the economic growth of the members.