IDEAS home Printed from https://ideas.repec.org/a/spr/dyngam/v14y2024i1d10.1007_s13235-023-00528-5.html
   My bibliography  Save this article

Benefits of Rent Sharing in Dynamic Resource Games

Author

Listed:
  • Frederick Ploeg

    (University of Oxford
    University of Amsterdam)

Abstract

Ngo Van Long’s classic paper on the risk of expropriation of natural resources published in a 1975 issue of the Journal of Economic Theory was an instant classic, which spawned a huge literature. Here I pay tribute to this wonderful brilliant yet modest scholar by briefly reviewing his contribution and then sketching how his insights can be used to analyse dynamic conflict over natural resources both as expropriation game and as a differential game on which Long has published extensively too. We discuss three results. First, if an incumbent faces a threat of a rival faction, extraction is more voracious if the factions do not share rents equally. Second, never-ending political conflict cycles are more inefficient if constitutional cohesiveness or rent sharing is strong and political instability is high. Third, resource wars are more intense if rent sharing is weak, reserves of resources are high, the wage is low, and elections occur less frequently.

Suggested Citation

  • Frederick Ploeg, 2024. "Benefits of Rent Sharing in Dynamic Resource Games," Dynamic Games and Applications, Springer, vol. 14(1), pages 20-32, March.
    • Handle: RePEc:spr:dyngam:v:14:y:2024:i:1:d:10.1007_s13235-023-00528-5
    DOI: 10.1007/s13235-023-00528-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13235-023-00528-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13235-023-00528-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. José G. Montalvo & Marta Reynal-Querol, 2005. "Ethnic Polarization, Potential Conflict, and Civil Wars," American Economic Review, American Economic Association, vol. 95(3), pages 796-816, June.
    2. Lei, Yu-Hsiang & Michaels, Guy, 2014. "Do giant oilfield discoveries fuel internal armed conflicts?," Journal of Development Economics, Elsevier, vol. 110(C), pages 139-157.
    3. Timothy Besley & Torsten Persson, 2011. "Fragile States And Development Policy," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 371-398, June.
    4. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1384-1421.
    5. Ngo Van Long, 2019. "How to Manage, Induce, or Prevent Regime Shifts: A Selective Survey," CIRANO Working Papers 2019s-27, CIRANO.
    6. Frederick van der Ploeg & Cees Withagen, 2015. "Global Warming and the Green Paradox: A Review of Adverse Effects of Climate Policies," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 285-303.
    7. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 360-394, August.
    8. Benchekroun, Hassan & Gaudet, Gerard & Van Long, Ngo, 2006. "Temporary natural resource cartels," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 663-674, November.
    9. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    10. Timothy Besley & Torsten Persson, 2011. "The Logic of Political Violence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1411-1445.
    11. Petros G. Sekeris, 2014. "The tragedy of the commons in a violent world," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 521-532, September.
    12. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    13. Robert T. Deacon & Henning Bohn, 2000. "Ownership Risk, Investment, and the Use of Natural Resources," American Economic Review, American Economic Association, vol. 90(3), pages 526-549, June.
    14. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    15. van der Ploeg, Frederick, 2018. "Political economy of dynamic resource wars," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 765-782.
    16. Gaudet, Gerard & Lasserre, Pierre, 1988. "On comparing monopoly and competition in exhaustible resource exploitation," Journal of Environmental Economics and Management, Elsevier, vol. 15(4), pages 412-418, December.
    17. Long, Ngo Van & Sinn, Hans-Werner, 1985. "Surprise Price Shifts, Tax Changes and the Supply Behaviour of Resource Extracting Firms," Australian Economic Papers, Wiley Blackwell, vol. 24(45), pages 278-289, December.
    18. Daniel Leonard & Ngo Van Long, 2012. "Endogenous Changes in Property Rights Regime," The Economic Record, The Economic Society of Australia, vol. 88(280), pages 79-88, March.
    19. Konrad Kai A. & Olsen Trond E. & Schob Ronnie, 1994. "Resource Extraction and the Threat of Possible Expropriation: The Role of Swiss Bank Accounts," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 149-162, March.
    20. James D. Fearon, 2005. "Primary Commodity Exports and Civil War," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 483-507, August.
    21. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hassan Benchekroun & Gerhard Sorger, 2024. "Preface: Special issue of Dynamic Games and Applications in Memory of Professor Ngo Van Long," Dynamic Games and Applications, Springer, vol. 14(1), pages 1-6, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. van der Ploeg, Frederick, 2018. "Political economy of dynamic resource wars," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 765-782.
    2. Rodriguez Acosta, Mauricio, 2016. "Essays in political economy and resource economic : A macroeconomic approach," Other publications TiSEM 1e39ef1b-43a2-4f95-892c-6, Tilburg University, School of Economics and Management.
    3. Frederick van der Ploeg, 2017. "Rapacious Oil Exploration in face of Regime Switches: Breakthrough Renewable Energy and Dynamic Resource Wars," Development Working Papers 415, Centro Studi Luca d'Agliano, University of Milano.
    4. Morelli, Massimo & Rohner, Dominic, 2015. "Resource concentration and civil wars," Journal of Development Economics, Elsevier, vol. 117(C), pages 32-47.
    5. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    6. Kodjovi M. Eklou, 2020. "A Leadership Curse? Oil Price Shocks and the Selection of National Leaders," Cahiers de recherche 20-05, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    7. Mahdi FAWAZ, 2020. "Ressources naturelles et guerres civiles au Moyen-Orient," Bordeaux Economics Working Papers 2020-09, Bordeaux School of Economics (BSE).
    8. Roland Hodler & Paul Schaudt & Alberto Vesperoni, 2023. "Mining for Peace," CESifo Working Paper Series 10207, CESifo.
    9. Nicolas Berman & Mathieu Couttenier & Raphael Soubeyran, 2021. "Fertile Ground for Conflict," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 82-127.
    10. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," Working Papers hal-01940461, HAL.
    11. Samuel Bazzi, Christopher Blattman, 2011. "Economic Shocks and Conflict: The (Absence of?) Evidence from Commodity Price- Working Paper 274," Working Papers 274, Center for Global Development.
    12. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," CERDI Working papers hal-01940461, HAL.
    13. Cordella, Tito & Onder, Harun, 2020. "Sharing oil rents and political violence," European Journal of Political Economy, Elsevier, vol. 63(C).
    14. Andrea Marcucci & Dominic Rohner & Alessandro Saia, 2023. "Ballot or Bullet: The Impact of the UK’s Representation of the People Act on Peace and Prosperity," The Economic Journal, Royal Economic Society, vol. 133(652), pages 1510-1536.
    15. Bhattacharya, Prasad Sankar & Chowdhury, Prabal Roy & Rahman, Habibur, 2023. "Does credit availability mitigate domestic conflict?," Economic Modelling, Elsevier, vol. 119(C).
    16. Bharati, Tushar & Jetter, Michael & Malik, Muhammad Nauman, 2024. "Types of communications technology and civil conflict," Journal of Development Economics, Elsevier, vol. 170(C).
    17. David Castells-Quintana & Maria del Pilar Lopez-Uribe & Tom McDermott, 2015. "Climate change and the geographical and institutional drivers of economic development," GRI Working Papers 198, Grantham Research Institute on Climate Change and the Environment.
    18. Massimiliano Calì & Alen Mulabdic, 2017. "Trade and civil conflict: Revisiting the cross-country evidence," Review of International Economics, Wiley Blackwell, vol. 25(1), pages 195-232, February.
    19. Frederick van der Ploeg, 2018. "Breakthrough Renewables and the Green Paradox," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 74(1), pages 52-70, March.
    20. Lax-Martinez, Gema & Rohner, Dominic & Saia, Alessandro, 2022. "Threat of taxation, stagnation and social unrest: Evidence from 19th century sicily," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 361-371.

    More about this item

    Keywords

    Political conflict cycles; Rent sharing; Resource wars; Rapacious depletion; Hold-up problem;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:dyngam:v:14:y:2024:i:1:d:10.1007_s13235-023-00528-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.