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Secession with Natural Resources

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  • Amrita Dhillon
  • Pramila Krishnan
  • Manasa Patnam
  • Carlo Perroni

Abstract

We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited a relatively larger proportion of natural resources. We argue that these patterns reflect how political reorganisation affected the quality of state governance of natural resources. We describe a model of collusion between state politicians and resource rent recipients that can account for the relationships we see in the data between natural resource abundance and post-break-up local outcomes.

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  • Amrita Dhillon & Pramila Krishnan & Manasa Patnam & Carlo Perroni, 2020. "Secession with Natural Resources," The Economic Journal, Royal Economic Society, vol. 130(631), pages 2207-2248.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:631:p:2207-2248.
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    2. Asongu, Simplice A & Odhiambo, Nicholas M, 2023. "Governance quality and trade performance in Sub-Saharan Africa," Working Papers 29697, University of South Africa, Department of Economics.
    3. Andersen, Jørgen Juel & Sørensen, Rune Jørgen, 2022. "The zero-rent society: Evidence from hydropower and petroleum windfalls in Norwegian local governments," Journal of Public Economics, Elsevier, vol. 209(C).

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