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The politics of resource booms

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  • Ahmed S. Mahmud

    ()

  • Giacomo De Luca

    ()

  • Juan F. Vargas

    ()

Abstract

This paper develops a simple model to investigate how resource-driven economic booms shape the equilibrium political institutions of resource-rich societies and in uence the likelihood of experiencing civil war. In our model a strong government apparatus favors property rights protection but also makes the state more powerful and hence may induce predatory autocratic regimes over democracy. We characterize the parameter space of each political outcome in terms of the type of the available natural resources. Economic booms based on resources that are privately exploited empower the citizens and tend to ease democratic transitions. In contrast, booms based on resources exploited by the state tend to favor more dictatorial regimes. Finally, economic booms based on resources that can be exploited either by the state or by private citizens incite preemptive actions by both parties that may result in civil war. We discuss the predictions of the model using historical and contemporary examples.

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Bibliographic Info

Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 010082.

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Length: 26
Date of creation: 06 Nov 2012
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Handle: RePEc:col:000092:010082

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Keywords: Resource Boom; Autocracy; Democracy; Civil War.;

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  1. Caselli, Francesco & Tesei, Andrea, 2011. "Resource Windfalls, Political Regimes, and Political Stability," CEPR Discussion Papers 8662, C.E.P.R. Discussion Papers.
  2. James A. Robinson & Ragnar Torvik & Thierry Verdier, 2003. "Politcal Foundations of the Resource Curse," DELTA Working Papers 2003-33, DELTA (Ecole normale supérieure).
  3. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
  4. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
  5. Ross, Michael L., 2004. "How Do Natural Resources Influence Civil War? Evidence from Thirteen Cases," International Organization, Cambridge University Press, vol. 58(01), pages 35-67, February.
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