Resource curse and growth challenges in MENA oil exporter countries: A case for governance reforms in the post Arab Spring uprisings context

Abstract

AbstractIn the theoretical backdrop of the resource curse problems confronting the resource‐rich countries, this paper, primarily examines the impact of oil rents on economic growth and the related resource curse symptoms in Middle East and North Africa (MENA) oil exporter countries. The existence of and too much dependence on natural resources prevents many oil, gas, and mineral‐rich nations from reaping their full growth potential. They are generally less stable economically, more autocratic, and more vulnerable to conflicts than countries without these resources. The paper then critically discusses the role of governance in averting the resource curse problems by adopting oil rents throughout the pre and post Arab Spring revolution during 1996–2019 as an economic tool for diversification. We apply the fixed‐effects model and the pooled ordinary least squares (OLS) estimations, in addition to the generalized estimating equations (GEE). It is found that oil rents have a positive impact on the growth of MENA countries, posing serious resource curse challenges in the emerging context. While diversification through governance plays an important role, oil rents hamper economic diversification leading to rent‐seeking activities. The results of the paper provide important policy implications for oil exporting counties in the MENA region.