03.06.2025 New Policy Note Published: How Oil Rents Undermine Patience and Economic Growth

How does reliance on oil revenues shape economic behaviour worldwide? This column reports new research showing that oil rents weaken governance, eroding patience – a key driver of economic growth and, according to the 13th century Persian poet Rumi, ‘the key to joy’. Policy measures to counter the damage include enhancing transparency in oil revenue management, strengthening independent oversight institutions and ensuring that sovereign wealth funds have robust rules of governance.

A new policy note authored by Prof.  Farzanegan and published in the forum- ERF policy portal by the Economic Research Forum (ERF) presents empirical evidence on the psychological and institutional consequences of oil rents. The study shows that reliance on oil revenues not only weakens governance structures but also erodes patience—a behavioral trait strongly associated with long-term economic development. Using cross-country data, the analysis finds that higher oil rents are linked to lower levels of patience in society, reinforcing short-term economic behavior and undermining the foundations of sustainable growth. These findings contribute to a growing body of literature on the non-material effects of resource wealth. 

The policy note is available at the ERF Policy Portal: https://theforum.erf.org.eg/2025/06/03/losing-the-key-to-joy-how-oil-rents-undermine-patience-and-economic-growth/