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Conflict Diamonds

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Author Info
Olsson, Ola () (Department of Economics, School of Economics and Commercial Law, Göteborg University)

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Abstract

’Conflict diamonds’ refers to the fatal role that diamonds are believed to have played in several African conflicts. The article analyzes the impact of diamond abundance on economic growth in light of the broader, previously discovered empirical finding of a ’curse of natural resources’. By extending the theory of appropriative conflict, a predator-prey game is outlined in which a rebel chooses between peaceful production and predation on natural resources controlled by the ruler. It is shown that whereas an increase in natural resources might increase the ruler’s public utility investments, it might also lead to a crowding-out in favor of defense spendings, which depresses growth. As predicted by the model, a cross-country regression analysis suggests that diamond abundance has a ’U-shaped’ relationship with economic growth.

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File URL: http://hdl.handle.net/2077/2831
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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 86.

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Length: 26 pages
Date of creation: 09 Jan 2003
Date of revision: 30 Nov 2003
Handle: RePEc:hhs:gunwpe:0086

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research
Keywords: diamonds; appropriative conflict; curse of natural resources; growth; predation;

Other versions of this item:

Find related papers by JEL classification:
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December. [Downloadable!] (restricted)
  2. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February. [Downloadable!] (restricted)
  3. Acemoglu, Daron & Johnson, Simon & Robinson, James A, 2002. "An African Success Story: Botswana," CEPR Discussion Papers 3219, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April. [Downloadable!] (restricted)
  5. Roemer, John E, 1985. "Rationalizing Revolutionary Ideology," Econometrica, Econometric Society, vol. 53(1), pages 85-108, January. [Downloadable!] (restricted)
  6. Neary, Hugh M, 1997. " A Comparison of Rent-Seeking Models and Economic Models of Conflict," Public Choice, Springer, vol. 93(3-4), pages 373-88, December. [Downloadable!] (restricted)
  7. Hugh Neary, 1997. "A comparison of rent-seeking models and economic models of conflict," Public Choice, Springer, vol. 93(3), pages 373-388, December. [Downloadable!] (restricted)
  8. Olsson, Ola & Hibbs Jr., Douglas A., 2000. "Biogeography and Long-Run Economic Development," Working Papers in Economics 26, Göteborg University, Department of Economics, revised 11 Aug 2000. [Downloadable!]
    Other versions:
  9. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May. [Downloadable!] (restricted)
    Other versions:
  11. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-83, May. [Downloadable!] (restricted)
  12. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September. [Downloadable!] (restricted)
    Other versions:
  13. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May. [Downloadable!] (restricted)
  14. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May. [Downloadable!] (restricted)
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    Other versions:
  16. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Davide Fiaschi, 2009. "Natural Resources, Social Conflict and Poverty Trap," Discussion Papers 2009/82, Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy. [Downloadable!]
  2. Olsson, Ola & Congdon, Heather, 2003. "Congo: The Prize of Predation," Working Papers in Economics 97, Göteborg University, Department of Economics, revised 30 Oct 2003. [Downloadable!]
  3. Bennour, Khaled, 2008. "The Value of Rents and the Likelihood of Conflicts," MPRA Paper 15012, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  4. Dibeh, Ghassan, 2008. "Resources and the Political Economy of State Fragility in Conflict States: Iraq and Somalia," Working Papers RP2008/35, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  5. Dalgaard, C. & Olsson, O., 2007. "Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion," Cambridge Working Papers in Economics 0765, Faculty of Economics, University of Cambridge. [Downloadable!]
    Other versions:
  6. Elissaios Papyrakis & Reyer Gerlagh, 2005. "Natural Resources, Innovation, and Growth," DEGIT Conference Papers c010_054, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  7. Elissaios Papyrakis, 2004. "Natural Resources, Innovation, and Growth," Working Papers 2004.129, Fondazione Eni Enrico Mattei. [Downloadable!]
  8. Dalgaard, Carl-Johan & Olsson, Ola, 2006. "Windfall Gains, Political Economy, and Economic Development," Working Papers in Economics 223, Göteborg University, Department of Economics. [Downloadable!]
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