We examine empirically the relationship between crude oil prices and the ebb and flow of democratic institutions, in order to test the hypothesis that high oil prices undermine democracy and sustain autocracy. We use a variety of time series and panel data methods over a wide range of country subsamples and time periods, finding strictly no evidence in favour of this so-called ‘First Law of Petropolitics’ (Friedman 2006).The author looks at the period 1961-2007.
If you wonder about Venezuela, this is the graph [the crude oil price is the dotted line]:
The title of the paper, by Romain Wacziarg, is "The First Law of Petropolitics" (Economica, 2012).
Government has to take necessary steps for high oil prices, because it critically effects the middle class families.
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