Rent seekers in rentier states: When greed brings peace
AbstractAre natural resources a source of conflict or stability? Empirical studies demonstrate that rents from natural resources, and in particular oil, are an important source of civil war. Allegedly, resource rents attract rent seekers, which destabilize society. However, there is a large literature on how so-called rentier states manage to pacify opposition groups by handing out special favors. The present paper attempts to bridge the gap between the rent-seeking view of resource rents as a source of conflict and the rentier state view which emphasizes the role of resource rents in promoting peace and stability, and show how one may lead to the other. The mechanism that we highlight relies on the notion that higher rents may activate more interest groups in a power struggle. We demonstrate that the associated increased cost of conflict may in fact promote social stability. The peaceful solution is upheld by a self reinforcing transfer program, in the form of patronage employment. The chance of conflict and rent dissipation in our model is highest for intermediate levels of resource rents, where the government cannot make credible commitments to the opposition groups.
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Bibliographic InfoPaper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 690.
Date of creation: Jan 2010
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Other versions of this item:
- Kjetil Bjorvatn & Alireza Naghavi, 2010. "Rent seekers in rentier states: When greed brings peace," Center for Economic Research (RECent) 039, University of Modena and Reggio E., Dept. of Economics.
- Kjetil Bjorvatn & Alireza Naghavi, 2010. "Rent Seekers in Rentier States: When Greed Brings Peace," Working Papers 2010.39, Fondazione Eni Enrico Mattei.
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-05 (All new papers)
- NEP-ENE-2010-02-05 (Energy Economics)
- NEP-GTH-2010-02-05 (Game Theory)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Natural resources, rent seeking and civil war
by Economic Logician in Economic Logic on 2010-06-23 14:02:00
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