The Efficiency of Institutions: Political Determinants of Oil Consumption in Democracies

Oil consumption has varied significantly among democracies, but scholars have not systematically studied the political determinants of this variation. What effects do political institutions have on a democratic country's propensity to consume oil? Other things being equal, more centralized national political institutions facilitate the adoption of policies that lower oil intensity. A time-series, cross-sectional analysis of all democracies since the first oil shock in 1973, using an error correction model to separate short- and long-term effects and to correct for the nonstationarity of the dependent variable, provides strong support for a link between numerous veto players and slower reductions in oil intensity along with weaker support for the influence of party decentralization.