Oil and growth in transition countries

Abstract

This paper examines the impact of oil on economic growth in transition economies of the former Soviet Union and Central and Eastern Europe.I use oil production and reserves data in a series of panel estimations to show that oil has had positive growth effects between 1990-2006, although they appear to be diminishing for very large producers. These positive effects are confirmed when I consider different oil ownership structures. Oil has however had a negative effect on human capital formation, and corruption and democracy levels. Additionally, I find that privatisation levels have had positive growth effects, while privatisation speed has had negative effects on growth.