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Unformatted text preview: economy and its impact on the world as we know it,” Energy Policy 36 (2008) 522–530, ideas.repec.org/a/eee/enepol/v36y2008i2p522-530.html] E. Liu Interestingly, evidence suggests that the oil economy generally has not been all that good for the oil-producing nations. Certainly, vast sums of money flow into the oilproducing countries, and they are not without the trappings of wealth (Roberts, 2004; Vaitheeswaran, 2003). Equally certain is that much of that money has been squandered on corruption, ‘‘military adventurism,’’ and terrorism (Jaffe, 2004). Yet, there is also a fascinating phenomenon occurring at the same time. Many oil producers encounter serious economic trouble, trouble that has been tied directly to their oil-related activities (Heal and Chichilnisky, 1991). For example, according to the World Bank, for the period 1960–1983, developing nations that exported oil experienced lower growth rates than developing nations that did not export oil. The reasons for such an outcome are intricate, but the bottom line is industrial economies, that is, economies that are homogeneous and integrated, are more likely to cope effectively with the consequences of oil exportation (Heal and Chichilnisky, 1991). Given this curious economic factoid, one can expect that the OPEC nations might actually be better off in the long term due to a transition to a hydrogen economy. With oil exports declining as the transition occurred, these nations would have no choice but to reduce their dependence on oil export revenues and balance out their economies (or face economic ruin, destabilization, and worse). 221 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 AT: Oil Key to Saudi Stability 222 Oil DDW 2012 1 Arab states are unstable despite oil wages due to poor governance Elbadawi, Research Coordinator for the African Economic Research Consortium in Kenya and Gelb, chief of, the Transition and Macro-Adjustment Division of the World Bank's Policy Research , 10 Ibrahim A. Elbadawi, Research Coordinator for the African Economic Research Consortium in Kenya and Alan H. Gelb, chief of, the Transition and Macro-Adjustment Division of the World Bank's Policy Research, 12-10, [“Economic Diversification and Development in the Arab World,” The Economic Research Forum, http://www.eip.gov.eg/Upload/Publications/ERf_PRR_35[1].pdf] E. Liu The received literature suggests that most Arab countries have experienced volatile, short-run growth and long-term stagnation. This has been linked to the failure of most countries to undertake medium-term, counter-cyclical macroeconomic policies. It is also linked to their failure to mediate conflicting interests during post oil booms due to their glaring lack of democracy, transparency, and accountability (Elbadawi, 2005a, 2005b). Related to this is that most, if not all, Arab countries continued to pursue old, state-led development strategies that, arguably, have outlived their effectiveness, as manifested in the massive unemployment crisis that affli...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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