Property Rights, Oil and Income Levels: Over a Century of Evidence

We investigate the e¤ects of di¤erent regimes of control rights over oil exploitation on ag- gregate domestic income. We construct a new panel dataset on petroleum ownership struc- tures for up to 68 countries between 1867-2008, distinguishing among regimes of Domestic Control, Foreign Control, and international Partnerships. Results show that Partnerships tend to generate higher domestic income than Foreign and Domestic Control. This result is robust to controlling for political regimes (i.e. democracy, anocracy, autocracy), time e¤ects, and other factors. Existing theories of incomplete contracts capture several aspects, but not the general mechanism underlying the relationships between aggregate domestic income and control regimes in primary sectors.