Is oil bad for democracy?

By Tanya Brugh
Published: April 28, 2008
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Steve Haber, Director of the Social Science History Institute and Associate<br /> Director of IRiSS, and students from his research team

IRiSS

In political science, scholars have often theorized that there is a political resource curse: democracy and oil are inversely related.  Political scientist Steve Haber, the A.A. and Jeanne Welch Milligan  Professor, and a group of his students challenged this theory, crunching massive data sets in order to find a definitive answer.

 According to the resource curse theory, when oil exports increase, governments rely on revenues from oil instead of income or property taxes. Because government leaders aren't relying on citizens for tax revenue, they become less responsive to their needs, wishes, and concerns. This allows authoritarianism to take root. Dictators are then able to consolidate their hold on power by using the oil tax revenues to fund a loyal group of cronies, circumventing the need to secure loyalty and legitimacy from their citizens.

 Haber formed a research team of graduate and undergraduate students to examine tax records and other data from nine countries, including Mexico, Venezuela, Ecuador, and Nigeria. Using research support provided in part by Stanford's Institute for Research in the Social Sciences (IRiSS), the group then mapped the data to an index that measures the competitiveness of political participation in each country. The result? The resource curse doesn't exist, Haber says. "The fundamental institutions of countries determine their long-run political outcomes, not whether those countries do or do not have oil."

 Nikki Velasco, a graduate student in political science, managed student researchers working on the project. "When I become a  professor, I hope to copy this research model and involve undergraduates," she says. "Under our research formula, Stanford undergraduates are creating data sets that International Monetary Fund economists with PhDs typically produce. That's how innovative and high caliber our research team is."

By tapping into various computing and administrative supports offered  by IRiSS, Haber's team executed an unprecedented new research approach that is shaping the course of social science research at Stanford and beyond. Working closely with faculty mentors, students at the Institute are working on problems of democratic stability, poverty, population and disease transmission, and the impact of philanthropy and entrepreneurship.  Through its efforts, IRiSS strives to increase the impact of social science research on public policy, business innovation, and social entrepreneurship.

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