IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/234576.html
   My bibliography  Save this paper

How to Conceptualize the Resource Curse and Dutch Disease Theories in the Case of Azerbaijan? Initial and Negative Findings

Author

Listed:
  • Niftiyev, Ibrahim

Abstract

Azerbaijan's economy is extractive industry-led and not well-diversified. A comprehensive understanding of the role of the oil industry in the Azerbaijani economy is still a desideratum. Azerbaijan's national economy was a popular case study for the theories such as the natural resource curse (NRS) and Dutch disease (DD); however, a conclusive statement is yet to be found. Many new questions arise as the impact of the crisis periods, institutions, and monetary indicators are being explored. This working paper is nothing more than experimentation results for the Azerbaijan economy within the NRS and DD theories. Surely, not everything can be achieved from the first trial and sound accomplishments need to be built on the shoulders of the negative results and failed hypotheses tests following the already existing analytical frameworks. Despite data issues and lack of proper theoretical conceptualizations of the Azerbaijan economy, this working paper reports the results of the Ordinary Least Squares (OLS) and Robust Least Squares (RLS) to orient the follow-up studies in the near future. Despite academia argues that nowadays linear relationships are hard to obtain, this working paper's main assumption is still a linear association among the variables of interest. Despite the results from this working paper are mixed, particular negative associations between the institutional quality measured via the several political, institutional, and governance indicators, and oil-related variables are present in the case of Azerbaijan between 1996–2019. To explain, although the negative impacts of the real effective exchange rate (REER), REER growth rates, the nominal effective exchange rate (NEER), and NEER growth rates were less than expected, oil prices and changes in oil prices played a great role (negative) in the output, employment, and returns on capital in the Azerbaijani economy. Moreover, particular negative associations between the oil-related variables, and institutional, political, and governance indicators are present, whereas the quantity and quality of the education in the Azerbaijan economy do not fully reflect any serious negative impacts. These experimental models possess a high amount of stability; however, they should be treated as initial starting points. The mentioned facts must be considered by the policymakers when the non-oil development of the Azerbaijani economy is being discussed.

Suggested Citation

  • Niftiyev, Ibrahim, 2021. "How to Conceptualize the Resource Curse and Dutch Disease Theories in the Case of Azerbaijan? Initial and Negative Findings," EconStor Preprints 234576, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:234576
    DOI: 10.2139/ssrn.3857936
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/234576/1/SSRN-id3857936.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.2139/ssrn.3857936?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Thomas De Waal, 2012. "A Broken Region: The Persistent Failure of Integration Projects in the South Caucasus," Europe-Asia Studies, Taylor & Francis Journals, vol. 64(9), pages 1709-1723.
    2. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    3. Bayramov, Vugar & Abbas, Gulnara, 2017. "Oil shock in the Caspian Basin: Diversification policy and subsidized economies," Resources Policy, Elsevier, vol. 54(C), pages 149-156.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Iryna Sotnyk & Tetiana Kurbatova & Oleksandr Kubatko & Olha Prokopenko & Gunnar Prause & Yevhen Kovalenko & Galyna Trypolska & Uliana Pysmenna, 2021. "Energy Security Assessment of Emerging Economies under Global and Local Challenges," Energies, MDPI, vol. 14(18), pages 1-20, September.
    2. Ganira Ibrahimova & Petra Moog, 2023. "Colonialism versus independence—the role of entrepreneurial ecosystems in Azerbaijan over time," Small Business Economics, Springer, vol. 61(3), pages 1289-1336, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aguirre Unceta, Rafael, 2021. "The economic and social impact of mining-resources exploitation in Zambia," Resources Policy, Elsevier, vol. 74(C).
    2. Wang, Shuhong & Tian, Wenqian & Lu, Binbin, 2023. "Impact of capital investment and industrial structure optimization from the perspective of "resource curse": Evidence from developing countries," Resources Policy, Elsevier, vol. 80(C).
    3. Vu, Trung V., 2020. "Economic complexity and health outcomes: A global perspective," Social Science & Medicine, Elsevier, vol. 265(C).
    4. Ngassam, Sylvain B. & Asongu, Simplice A. & Ngueuleweu, Gildas Tiwang, 2024. "A revisit of the natural resource curse in the tourism industry," Resources Policy, Elsevier, vol. 88(C).
    5. Abman, Ryan & Longbrake, Gabrial, 2023. "Resource development and governance declines: The case of the Chad–Cameroon petroleum pipeline," Energy Economics, Elsevier, vol. 117(C).
    6. Papyrakis, Elissaios & Parcero, Osiris Jorge, 2022. "The psychology of mineral wealth: Empirical evidence from Kazakhstan," Resources Policy, Elsevier, vol. 77(C).
    7. Amiri, Hossein & Samadian, Farzaneh & Yahoo, Masoud & Jamali, Seyed Jafar, 2019. "Natural resource abundance, institutional quality and manufacturing development: Evidence from resource-rich countries," Resources Policy, Elsevier, vol. 62(C), pages 550-560.
    8. Tiba, Sofien, 2019. "Modeling the nexus between resources abundance and economic growth: An overview from the PSTR model," Resources Policy, Elsevier, vol. 64(C).
    9. Morck, Randall & Nakamura, Masao, 2018. "Japan's ultimately unaccursed natural resources-financed industrialization," Journal of the Japanese and International Economies, Elsevier, vol. 47(C), pages 32-54.
    10. Guozhu Li & Meichen Liu, 2022. "Spatiotemporal Evolution and Influencing Factors of Economic Resilience: Evidence from Resource-Based Cities in China," Sustainability, MDPI, vol. 14(16), pages 1-21, August.
    11. Sosson Tadadjeu & Henri Njangang & Simplice Asongu & Yann Nounamo, 2021. "Natural resources and wealth inequality: a cross-country analysis," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 39(3), pages 596-608, July.
    12. Keisuke Okada & Sovannroeun Samreth, 2021. "Oil bonanza and the composition of government expenditure," Economics of Governance, Springer, vol. 22(1), pages 23-46, March.
    13. Ouoba, Youmanli, 2020. "Natural resources fund types and capital accumulation: A comparative analysis," Resources Policy, Elsevier, vol. 66(C).
    14. Tadadjeu, Sosson & Njangang, Henri & Asongu, Simplice A. & Kamguia, Brice, 2023. "Natural resources, child mortality and governance quality in African countries," Resources Policy, Elsevier, vol. 83(C).
    15. Yao, Xilong & Wang, Hualing & Shao, Shuai & Li, Xiaoyu & Guo, Zhi, 2022. "“Booster” or “obstacle”: Can coal capacity cut policies moderate the resource curse effect? Evidence from Shanxi (China)," Resources Policy, Elsevier, vol. 75(C).
    16. Ifeoluwa Adeola Ologunde & Forget Mingiri Kapingura & Kin Sibanda, 2020. "Sustainable Development and Crude Oil Revenue: A Case of Selected Crude Oil-Producing African Countries," IJERPH, MDPI, vol. 17(18), pages 1-30, September.
    17. Tadadjeu, Sosson & Njangang, Henri & Ningaye, Paul & Nourou, Mohammadou, 2020. "Linking natural resource dependence and access to water and sanitation in African countries," Resources Policy, Elsevier, vol. 69(C).
    18. Horváth, Roman & Zeynalov, Ayaz, 2016. "Natural resources, manufacturing and institutions in post-Soviet countries," Resources Policy, Elsevier, vol. 50(C), pages 141-148.
    19. Amir Mousavi & Jeremy Clark, 2021. "The effects of natural resources on human capital accumulation: A literature survey," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1073-1117, September.
    20. Avom, Désiré & Keneck-Massil, Joseph & Njangang, Henri & Nvuh-Njoya, Youssouf, 2022. "Why are some resource-rich countries more sophisticated than others? The role of the regime type and political ideology," Resources Policy, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esprep:234576. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.