Abstract:
The rent resulting from the sale of oil and its allocation to social welfare, security and also strengthening the capacity of the government can help to improve the level of peace in a country (buying peace through oil rent). On the other hand, oil rent may lead to the weakening of social security, the creation of conflicts and a high degree of militarization through various channels, which results in an increase in violence in societies. Based on this, the main purpose of this article is to investigate the effect of oil rent on peace level in oil exporting countries during the period of 2010-2020. For this purpose, by using the theoretical literature and using the threshold panel method, the factors affecting the global peace index (GPI) have been modeled along with the oil rent. The results show that the effect of oil rent on the peace index is non-linear and in the form of a U-inverted relationship. The threshold value of oil rent is also estimated at 36% of GDP. In other words, before the threshold level, the share of oil rent in GDP had a positive and significant effect on the peace index; But after crossing this threshold level, the share of oil rent in GDP has a negative and significant effect on the peace index in the studied countries. Based on other results, per capita income, degree of economic openness, life expectancy and democracy have a positive and significant effect on the level peace in oil exporting countries.
Machine summary:
Per capita income, degree of economic openness, standard of living (human capital index), and democracy have had a positive and significant effect, while income inequality has had a negative and significant effect on the level of peace in oil-exporting countries.
In this study, the effect of a selected group of economic, social, and political factors on the level of national peace and related primary indicators in this field was examined in 162 developing and developed countries during the period 2007-2016.
The empirical findings of this study, using the negative binomial regression estimator, show the following results: First) The effect of natural resource rent on terrorism is positive in all models; especially when the Gini and Theil indices are entered into the model as inequality indicators.
Therefore, for the first time, this study empirically tests the non-linear effect of rent derived from oil sales on the (comprehensive and new) Global Peace Index 2 (GPI), which is provided by the 'Institute for Economics and Peace' 3 (IEP) and includes twenty-three sub-indices in the field of negative peace.
Given that the main hypothesis of the present research is testing the non-linear effects of oil rent on the Global Peace Index; therefore, its empirical model will be stated as a panel threshold model in the following form: peaceit=β0+β1Ln(income)it+β2Ln(inequality)it+β3Ln(open)it +β4Ln(life)it+β5democracyit+A(Ln(oil)it≤γ)∗β6Ln(oil)it +A(Ln(oil)it>γ)∗(β7+β8Ln(oil)it)+ϵit (2) A(Ln(oil)it≤γ)=1 if Ln(oil)it≤γ A(Ln(oil)it>γ)=1 if Ln(oil)it>γ In the above equation, Ln(oil)it is the threshold variable of the model and γ is the threshold value (amount) of the natural logarithm of the percentage share of oil rent from GDP; it is necessary to estimate its value empirically.
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