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Beyond divide and rule: weak dictators, natural resources and civil conflict

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  • Giacomo De Luca

    ()

  • Petros G. Sekeris

    ()

  • Juan F. Vargas

    ()

Abstract

We propose a model where an autocrat rules over an ethnically divided society. The dictator selects the tax rate over domestic production and the nation's natural resources to maximize his rents under the threat of a regime-switching revolution. We show that a weak ruler may let the country plunge in civil war to increase his personal rents. Inter-group fighting weakens potential opposition to the ruler, thereby allowing him to increase fiscal pressure. We show that the presence of natural resources exacerbatesthe incentives of the ruler to promote civil conflict for his own profit, especially if the resources are unequally distributed across ethnic groups. We validate the main predictions of the model using cross-country data over the period 1960-2007, and show that our empirical results are not likely to be driven by omitted observable determinants of civil war incidence or by unobservable country-specific heterogeneity.

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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 008893.

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Length: 37
Date of creation: 09 Aug 2011
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Handle: RePEc:col:000092:008893

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  1. Joan Esteban & Massimo Morelli & Dominic Rohner, 2010. "Strategic Mass Killings," UFAE and IAE Working Papers 826.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Francesco Caselli & Wilbur John Coleman II, 2006. "On the Theory of Ethnic Conflict," CEP Discussion Papers dp0732, Centre for Economic Performance, LSE.
  3. Georgy Egorov & Konstantin Sonin, 2005. "Dictators and Their Viziers: Agency Problems in Dictatorships," Economics Working Papers 0053, Institute for Advanced Study, School of Social Science.
  4. Olsson, Ola, 2003. "Conflict Diamonds," Working Papers in Economics 86, University of Gothenburg, Department of Economics, revised 30 Nov 2003.
  5. Petros Sekeris, 2011. "Endogenous elites: power structure and patron-client relationships," Economics of Governance, Springer, vol. 12(3), pages 237-258, September.
  6. Giacomo Luca & Petros Sekeris, 2012. "Land inequality and conflict intensity," Public Choice, Springer, vol. 150(1), pages 119-135, January.
  7. Anne Boschini & Anders Olofsg�rd, 2007. "Foreign aid: An instrument for fighting communism?," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 622-648.
  8. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series 1, Villanova School of Business Department of Economics and Statistics.
  9. Lorenzo Rocco & Zié Ballo, 2008. "Provoking a civil war," Public Choice, Springer, vol. 134(3), pages 347-366, March.
  10. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
  11. Fearon, James D. & Laitin, David D., 2000. "Violence and the Social Construction of Ethnic Identity," International Organization, Cambridge University Press, vol. 54(04), pages 845-877, September.
  12. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2008. "Coalition Formation in Non-Democracies," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 987-1009.
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