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.