The Resource Curse, Religious Practices and Household Behaviour: Evidence from Petroleum-rich & Selected Islamic Countries

Abstract

This thesis focuses on two main topics. The first relates to the resource curse, and the second is linked to the seasonality of prices during Ramadan. The first chapter examines whether oil revenues influence demographic outcomes in oil exporting countries with weak institutional quality, emphasizing the role of institutional quality as a mechanism. Our hypothesis is that an abundance of oil revenues in a weakly institutionalized country adversely impacts demographic outcomes through inadequate provision of public health services. Our dataset covers 2000-2017, allowing us to test this hypothesis using a large country panel data. Weak support is found for our hypothesis regarding infant mortality using a country specific fixed effects estimation approach. Nevertheless, oil wealth has a very mild impact on other demographic indicators in countries with weak governance. The second chapter explores the seasonal dynamics of local consumer prices with religious traditions. Specifically, this paper examines how Ramadan affects seasonal food prices. The case study in this chapter is based on the Kingdom of Saudi i Arabia since it is the centre of Islam. Ramadan is the ninth month in the Hijri calendar, and it is a month of fasting from sunrise to sunset for healthy Muslims. As a result, the daily meal schedule, frequency, and composition of meals change. It is hypothesized that Ramadan will impact food and non-food demand in Saudi Arabia during that month. This chapter analyses data for 24 food items, 8 non-food items, and 7 paid services. By treating seasonal effects deterministically, we can estimate the effect of Ramadan on commodities prices using OLS. We measure the intensity of Ramadan using both Hijri and Gregorian calendars. Results emphasize the unique nature of consumer behaviour during Ramadan. The third chapter extends the second but with a broader emphasis including more countries. In this chapter, we assess Ramadan's impact on the rise of food prices locally and globally. Unlike other price seasonality studies focusing on one commodity globally, this study analyses global market seasonality across a broad range of commodities. Furthermore, a major objective of this study is to investigate how Ramadan affects local market prices in selected Asian and African countries with diverse religious affiliations. We hypothesize that Ramadan will positively affect the prices of food commodities, and the extent of the impacts depends on the nature of the local and global markets. Our analysis shows that Ramadan has no long-term impact on global commodity prices. When positive Ramadan effects are detected locally, their magnitude is found to be very modest, thus suggesting Ramadan effects are not systematically present in local market commodity prices.