Resource Rich Muslim Countries and Islamic Institutional Reforms explores the "resource curse," a condition in which a country’s abundance of natural resources is negatively linked with the country’s development and economic growth, in resource rich Muslim countries. The resource curse puzzle has been studied for over twenty years, with prior researchers looking to prove its existence and explore its causes. Recent studies have begun to indicate institutional failure as a likely cause of the curse, as wealth of resources tends to cause counterproductive behaviors such as rent-seeking, patronage and corruption. The subpar economic performance of resource rich Muslim countries in the Organization of the Islamic Cooperation (OIC) could be attributed to the manifestation of a resource curse. Collectively, the member countries of the OIC contribute over 9% of the world’s total GDP with 22.8% of the world’s population. Saudi Arabia and the United Arab Emirates alone contribute about 17% of world oil production. Resource rich Muslim countries should be at the forefront of economic performance and growth, yet we see the opposite when we compare the performance of these countries to countries that are not resource rich (such as Spain, France, Hong Kong and Japan). Through an analysis of sample countries, the authors have discovered that natural resources exert a drag on the countries’ economic growth, thereby indicating the presence of the resource curse. Their research also found weaknesses in the quality of institutions as the cause of the curse. To counteract the negative effects of the resource curse in resource rich Muslim countries, the authors provide a number of Islamic institutional reforms.
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- New York, Bern, Berlin, Bruxelles, Vienna, Oxford, Wien, 2018. XX, 172 pp., 1 b/w ill., 20 tbl.
- About the author(s)/editor(s)
- About the book
- This eBook can be cited
- Foreword (Latifah Merican Cheong)
- Chapter 1: The OIC Countries
- OIC Countries and the Resource Curse
- Chapter 2: The Resource Curse—Theory, Explanations and Its Reversal
- The Resource Curse Theory—Sachs and Warner
- Supporters of the Resource Curse Theory
- Resource Curse Explanation—Dutch Disease
- Resource Curse Explanation—The Role of Institutions (Nigerian Disease)
- Military Expenditures, Armed Conflicts and the Resource Curse Theory
- Assessment of the Explanations for the Resource Curse
- Natural Resource Effects on Financial Development
- Reversing the Resource Curse
- Chapter 3: Resource Curse in OIC Countries: The Role of Institutions
- Institutions and Oil Rent Relations
- Financial Development and Oil Rent Relations
- Estimation Methods
- Basic Panel Estimation
- Pooled Mean Group (“PMG”) and Mean Group (“MG”) Methods
- The Results
- Empirical Results for Model 1—Resource Growth Equation
- Empirical Results for Model 2—Resource Growth Equation with Interaction Term
- Empirical Results for Model 3—Institutions and Oil Rent Relations
- Empirical Results for Model 4—Financial Development and Oil Rent Relations
- Robustness Analysis
- PMG Method
- Comparison with Top Oil-Producing Non-OIC Countries
- Chapter 4: Theories of Institutions
- Definition of Institutions in the Conventional Literature
- Institutional Change Propositions (North)
- Do Effective Institutions Support Economic Growth?
- Institutions According to Islam
- Islamic Institutional Economic Framework
- Do Institutions Support Sustained Economic Growth?
- Institutional Condition of Muslim Countries
- Chapter 5: Addressing the Resource Curse through an Ideal Islamic Institutional Framework
- Proposed Recommendations to Address the Curse and Strengthen Institutions
- Redirection of Education
- Duties and Accountability of State Authority and Citizens
- Enhanced Supervision
- Is Economic Reform Possible in the Absence of Political Reform?
- Chapter 6: Policy Assessment: Saudi Arabia, Malaysia and Qatar
- Saudi Arabia
- Chapter 7: Summary, Conclusions and Looking Ahead
- Summary and Conclusions
- Series index
We are indebted to Datuk Latifah Merican Cheong for her generous foreword to our modest contribution. We thank the panel of anonymous referees for their helpful comments and suggestions. The support and dedication of Dr. Koohi-Kamali and her outstanding team to this project are greatly appreciated. Last but not least, we acknowledge the support of our families without which this book would not have been possible.
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