Paper Title
The Nexus Between Income Inequality, Oil Resources and The Institutional System in Oil Exporting Countries: Evidence from Norway

Abstract
Within the existence of weak institutional environment and the spread of corruption in natural resources exporting countries, a big challenge has been raised to achieve high levels of growth and prosperity. Natural resources are a coin with two faces either a curse or a blessing depending on the state of the governmental system. Regulations play a key role for better resource exploitation. The current study attempts to investigate the nexus between income inequality, oil resources and the institutional system in oil rich countries (Norway). Using the autoregressive distributed lag (ARDL) bounds testing approach. The GINI index is used as a proxy for income inequality while oil rents and oil exports are used to measure the dependency on natural resources. Government stability and the interaction between oil rents and democracy are used as measures for the institutional system in Norway. Bound testing for co-integration and error correction model (ECM) under ARDL methodology was applied. Results have indicated the existence of a long run relationship among the variables. We found evidence that natural resource abundance widens income inequality while strong political and institutional framework reduces income inequality, which confirms previous findings in the literature. Between the terms “blessing and curse”, oil rich countries with strong political system and institutional framework as Norway have succeeded to maintain stability within the economy. Oil abundance in Norway widens Income Inequality but the effect is less when it is accompanied with strong institutional and governmental policies. Keywords - Income Inequality, Oil Rents, Institutional System, ARDL