We estimate the long-run effects of oil wealth on development by exploiting spatial variation in sedimentary basins—areas where petroleum can potentially form. Instrumental variables estimates indicate that oil production impedes democracy and fiscal capacity development, increases corruption, and raises GDP per capita without significantly harming the non-resource sectors of the economy. We find no evidence that oil production increases internal armed conflict, coup attempts, or political purges. In several specifications failure to account for endogeneity leads to substantial underestimation of the adverse effects of oil, suggesting that countries with higher-quality political institutions and greater fiscal capacity disproportionately select into oil production.
We consider the role of a politician's age in Italian municipal governments. When the term limit is not binding, younger mayors engage in political budget cycles more often than older mayors. Thus younger politicians behave more strategically in response to electoral incentives, probably because they expect to have a longer political career and stronger career concerns. We discuss and rule out several alternative interpretations. 706 ECONOMICA [OCTOBER P 8 k¼1 d k Elec m;t  1ðAge m;t 2 Bin k Þ þ g m þ f t þ m m;t . The sample is restricted to years following 'close' elections decided by a vote margin of 5 percentage points or fewer. The (omitted) reference age category is 18-30. Each included age bin is five years long, with the exception of the final bin, which is aggregated to avoid very small bin sizes.Economica
We evaluate the effect of a politician's age on political governance, reelection rates, and policies using data on Italian local governments. Our results suggest that younger politicians are more likely to behave strategically in response to election incentives: they increase spending and obtain more transfers from higher levels of government in preelection years. We argue that is a sign of stronger career concerns incentives.The results are robust to adopting three different identification strategies: fixed-effects regression, standard regression discontinuity design, and an augmented regression discontinuity design that controls for residual heterogeneity.JEL codes: C21, D78, H72, H77, J18.
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