ERF 26th Annual Conference
Oil Curse, Islamic Constitutions, and Democracy
No.
ERF26_163
Publisher
ERF
Date
June, 2020
Topic
P. Economic Systems
Q4. Energy
There is an ongoing debate on the relationship between Islam, oil wealth and (lack of) democratization. Considerable literature shows that Islam, represented as an informal institution by Muslim population share, has a negative effect on democracy, especially in oil-rich economics. This study examines the effects of formal institutions, specifically constitutions that prescribe Shari’a law as a source of legislation, on democracy. We use a newly developed coding of the degree to which Islam is incorporated in constitutions. Our empirical results show the constitutional entrenchment of Islamic supreme values significantly and negatively affects democracy. This relation remains robust when controlling for other variables, including Muslim population share, oil and gas rents, and per-capita GDP. We argue that Islamic constitutionalism, and not oil curse, is the reason for democracy deficit in Muslim-majority countries. Instrumental variable regressions support our hypothesis. However, we find no evidence that Islam is inimical to democracy when not entrenched in the constitution.
Research Fellows
Moamen Gouda
Associate Professor of Middle-East Economics, Hankuk University...
Research Fellows
Shimaa Hanafy
Assistant Professor of Development Economics, Division of...