Oil,Growth, and Health: What Does the Cross‐Country Evidence Really Show?*

We show that previous results from the body of literature on the resource curse have primarily been driven by the collapse in oil prices during the mid‐1980s. By exploiting cross‐country variations in the size of initial oil endowments and the timing of oil discoveries, we find that there is a stable positive relationship between oil abundance and long‐run economic growth. Using dynamic panel data methods, we also find that there is no evidence that higher oil rents hinder growth. However, to focus on material gain means that the welfare gain from oil is understated, because oil‐rich countries benefit more by the reduction in infant mortality and the gain in longevity. Interestingly, such oil‐led health improvements are more pronounced in non‐democratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites.     

The Mistreated Model: A Reply

This paper addresses the issues raised by Johnston et al. (2003) in relation to the spatial econometric treatment of the gravity model of trade in Porojan (2001). We show that the findings reported there are robust to alternative specifications. Furthermore, we indicate that the proposed formulation takes spatial effects into account while separating the impact of distance from far away trading partners from the 'neighborhood effect,' particularly within regional trading blocs.     

Open-Source Software Development and Distributed Innovation

Open-source software development is a production model thatexploits the distributed intelligence of participants in Internetcommunities. This model is efficient because of two relatedreasons: it avoids the inefficiencies of a strong intellectualproperty regime and it implements concurrently design and testingof software modules. The hazard of open source is that projectscan ‘fork’ into competing versions. However, open-sourcecommunities consist of governance structures that constitutionallyminimize this danger. Because open source works in a distributedenvironment, it presents an opportunity for developing countriesto participate in frontier innovation.     

Open Skies over the Middle East

The dynamism of air traffic markets in the Middle East obscures the persistence of restrictions on international competition. But how important are such restrictions for passenger traffic? This paper uses detailed data on worldwide passenger aviation to estimate the effect of air transport policy on international air traffic. The policy variable is a quantitative measure of the commitments under international agreements. The paper analyses, for the first time, not only bilateral agreements, but also plurilateral agreements such as the one among Arab states. The analysis finds that more liberal policy is associated with greater passenger traffic between countries. Higher traffic levels appear to be driven by larger numbers of city‐pairs being served, as well as by more passengers travelling along given routes. To demonstrate the quantitative implication of the estimates, two liberalisation scenarios in the Middle East are evaluated. Deepening the plurilateral agreement among Arab states would lead to a 30 per cent increase in intraregional passenger traffic. Widening the agreement to include Turkey would generate significantly larger gains because current policy vis‐à‐vis Turkey is much more restrictive.