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The Geography of Natural Resources, Ethnic Inequality and Development

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  • Christian Lessmann
  • Arne Steinkraus

Abstract

We study whether the spatial distribution of natural resources across different ethnic groups within countries impede spatial inequality, national economic performance, and the incidence of armed conflict. By providing a theoretical rent-seeking model and analysing a set of geocoded data for mines, night-time light emissions, local populations and ethnic homelands, we show that the distribution of resources is a major driving factor of ethnic income inequality and, thus, induces rent-seeking behaviour. Consequently, we extend the perspective of the resource curse to explain cross-country differences in economic performance and the onset of civil conflicts. We show that the inequality in the spatial distribution of resource endowments within countries drives the curse of natural resources, not the resources per se.

Suggested Citation

  • Christian Lessmann & Arne Steinkraus, 2017. "The Geography of Natural Resources, Ethnic Inequality and Development," CESifo Working Paper Series 6299, CESifo.
    • Handle: RePEc:ces:ceswps:_6299
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    References listed on IDEAS

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    7. Alberto Alesina & Stelios Michalopoulos & Elias Papaioannou, 2012. "Ethnic Inequality," Working Papers 2012-14, Brown University, Department of Economics.
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    10. 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.
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    13. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
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    16. Farzanegan, Mohammad Reza & Lessmann, Christian & Markwardt, Gunther, 2018. "Natural resource rents and internal conflicts: Can decentralization lift the curse?," Economic Systems, Elsevier, vol. 42(2), pages 186-205.
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    Cited by:

    1. Mohammad Reza Farzanegan & Marcel Thum, 2017. "Oil Dependency and Quality of Education: New Empirical Evidence," MAGKS Papers on Economics 201745, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Mohammad Reza Farzanegan & Marcel Thum, 2020. "Does oil rents dependency reduce the quality of education?," Empirical Economics, Springer, vol. 58(4), pages 1863-1911, April.
    3. Asatryan, Zareh & Baskaran, Thushyanthan & Birkholz, Carlo & Hufschmidt, Patrick, 2021. "Regional redistribution of mineral resource wealth in Africa," ZEW Discussion Papers 21-032, ZEW - Leibniz Centre for European Economic Research.
    4. Shantayanan Devarajan, 2018. "How to Use Oil Revenues Efficiently," Working Papers 1199, Economic Research Forum, revised 24 May 2018.
    5. Farzanegan, Mohammad Reza & Thum, Marcel, 2017. "More oil, less quality of education? New empirical evidence," CEPIE Working Papers 09/17, Technische Universität Dresden, Center of Public and International Economics (CEPIE).

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    More about this item

    Keywords

    natural resources; minerals; mines; night lights; luminosity; ethnic income inequality; spatial inequality; development; civil war; conflict;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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