Why Are Some Countries Immune to the Negative Political Effects of Natural Resource Wealth: An Empirical Analysis.

This paper presents a quantitative analysis on the question of why natural resource wealth has strong antidemocratic effects in some countries but not in others. Although the relevant literature acknowledges the perverse effects of natural resource wealth on the quality of democracy in general through systematic analyses, only anecdotal evidence has been presented regarding the immunity of some countries to the detrimental effects of natural resource wealth by alluding to rather vague concepts of state capacity, democratic consolidation or decentralized government. The current paper will be the first study to address this issue systematically by introducing a new variable: the level of market-contracting in a society, i.e. the degree by which individuals obtain their incomes, goods, and services by contracting on a market. Informed by the newly emerging economic norms theory, the empirical evidence suggests that societies with higher level of market-contracting are significantly less prone to the detrimental effects of natural resource wealth on democracy. This effect in such societies can be attributed primarily to a lack of patronage opportunities and a collective interest in the rule of law. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]