Reconciling empirics on the political economy of the resource curse hypothesis. Evidence from long-run relationships between resource dependence, democracy and economic growth in Iran

Abstract

This paper analyzes the long-run relationships between resource dependence, democracy and per capita economic growth in Iran using the ARDL approach of cointegration (Pesaran et al. 2001). We find that resource dependence and democracy have positive, negative, or no significant effect on the long-term growth in Iranian GDP over the period 1970–2017. This multifaceted result is an additional reason to explain the lack of consensus on the empirics of the political economy of the resource curse hypothesis. We show as the interpretation of statistical tests only based on the average effect of resource dependence on economic growth may be misleading.