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Natural resource extraction and civil conflict

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  • Janus, Thorsten

Abstract

Based on evidence linking natural resources to civil conflict, this paper studies two armed groups fighting to control a resource and possibly a second prize. Labor is used in the agricultural, resource extraction and conflict sectors, and the groups also buy a capital input to conflict subject to the constraint that capital spending cannot exceed resource earnings. I find that exogenous shocks can have different effects on conflict intensity depending on whether the credit constraint binds. In particular, international policies to ban natural resource exports from conflict zones (e.g. ‘blood diamonds’), raise agricultural productivity or limit the import of weapons will limit conflict intensity if the credit constraint binds. However, if the credit constraint does not bind, then the first two policies promote conflict, and so could even the third policy. The results therefore suggest some caution in international policymaking.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 97 (2012)
Issue (Month): 1 ()
Pages: 24-31

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Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:24-31

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Web page: http://www.elsevier.com/locate/devec

Related research

Keywords: Resource curse; Resource extraction; Conflict; Sanctions; Kimberley Process;

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References

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  1. Santiago Sanchez-Pages, 2004. "On the Social Efficiency of Conflict," ESE Discussion Papers 97, Edinburgh School of Economics, University of Edinburgh.
  2. Stefano DellaVigna & Eliana La Ferrara, 2007. "Detecting Illegal Arms Trade," NBER Working Papers 13355, National Bureau of Economic Research, Inc.
  3. Besley, Timothy J. & Persson, Torsten, 2008. "The Incidence of Civil War: Theory and Evidence," CEPR Discussion Papers 7101, C.E.P.R. Discussion Papers.
  4. Markus Brückner & Antonio Ciccone, 2009. "International Commodity Prices, Growth, and the Outbreak of Civil War in Sub-Saharan Africa," Working Papers 2009-37, FEDEA.
  5. Bornhorst, Fabian & Gupta, Sanjeev & Thornton, John, 2009. "Natural resource endowments and the domestic revenue effort," European Journal of Political Economy, Elsevier, vol. 25(4), pages 439-446, December.
  6. Verwimp, Philip, 2003. "The political economy of coffee, dictatorship, and genocide," European Journal of Political Economy, Elsevier, vol. 19(2), pages 161-181, June.
  7. Christa N. Brunnschweiler & Erwin Bulte, 2008. "Natural Resources and Violent Conflict: Resource Abundance, Dependence and the Onset of Civil Wars," CER-ETH Economics working paper series 08/78, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  8. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  9. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
  10. Katharina Wick & Erwin Bulte, 2006. "Contesting resources – rent seeking, conflict and the natural resource curse," Public Choice, Springer, vol. 128(3), pages 457-476, September.
  11. Deininger, Klaus, 2003. "Causes and consequences of civil strife - micro-level evidence from Uganda," Policy Research Working Paper Series 3045, The World Bank.
  12. Chassang, Sylvain & Miquel, Gerard Padró i, 2009. "Economic Shocks and Civil War," International Quarterly Journal of Political Science, now publishers, vol. 4(3), pages 211-228, October.
  13. Rubin, Barnett R., 2000. "The Political Economy of War and Peace in Afghanistan," World Development, Elsevier, vol. 28(10), pages 1789-1803, October.
  14. Markus Bruckner & Antonio Ciccone, 2010. "International Commodities Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Working Papers 1008, BBVA Bank, Economic Research Department.
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Citations

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Cited by:
  1. Frederick Van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," CESifo Working Paper Series 3244, CESifo Group Munich.
  2. Fabrizio Carmignani, . "Development outcomes, resource abundance,and the transmission through inequality," MRG Discussion Paper Series 3610, School of Economics, University of Queensland, Australia.
  3. Markwardt, Gunther & Farzanegan, Mohammad & Leßmann, Christian, 2013. "Natural-resource rents and internal conflicts - Can decentralization lift the curse?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79940, Verein für Socialpolitik / German Economic Association.
  4. Moshik Lavie & Christophe Muller, 2011. "Incentives and Survival in Violent Conflicts," Research Working Papers 47, MICROCON - A Micro Level Analysis of Violent Conflict.

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