IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v28y2020i2p395-407.html
   My bibliography  Save this article

Sourcing from conflict regions: Policies to improve transparency in international supply chains

Author

Listed:
  • Julika Herzberg
  • Oliver Lorz

Abstract

In this paper, we study how unilateral policies concerning certain conflict raw materials influence prices, illegal mining activities, and welfare. Firms in the North import natural resources from the South to produce final consumption goods. In one of the countries in the South, local groups attempt to access natural resources, which results in rent‐seeking conflicts with the government and in illegal mining. We find that a unilateral embargo against the conflict country as well as certification of legal mines can reduce rent‐seeking and illegal mining with different welfare consequences in the countries involved.

Suggested Citation

  • Julika Herzberg & Oliver Lorz, 2020. "Sourcing from conflict regions: Policies to improve transparency in international supply chains," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 395-407, May.
    • Handle: RePEc:bla:reviec:v:28:y:2020:i:2:p:395-407
    DOI: 10.1111/roie.12456
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/roie.12456
    Download Restriction: no
    File URL: https://libkey.io/10.1111/roie.12456?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nik Stoop & Marijke Verpoorten & Peter van der Windt, 2018. "More Legislation, More Violence? The Impact of Dodd-Frank in the DRC," SALDRU Working Papers 231, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
    3. Alan Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
    4. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    5. Jean‐Marie Cardebat & Patrice Cassagnard, 2010. "North South Trade and Supervision of the Social Quality of Goods from the South," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 168-178, February.
    6. Drusilla K. Brown, 2001. "Labor Standards: Where Do They Belong on the International Trade Agenda?," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 89-112, Summer.
    7. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    8. Eleonora Nillesen & Erwin Bulte, 2014. "Natural Resources and Violent Conflict," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 69-83, October.
    9. Podhorsky, Andrea, 2013. "Certification programs and north-south trade," Journal of Public Economics, Elsevier, vol. 108(C), pages 90-104.
    10. Christopher K Butler & Scott Gates, 2012. "African range wars: Climate, conflict, and property rights," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(1), pages 23-34, January.
    11. Dominic P. Parker & Bryan Vadheim, 2017. "Resource Cursed or Policy Cursed? US Regulation of Conflict Minerals and Violence in the Congo," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 1-49.
    12. Campbell, Colin L. & Heinrich, Daniel & Schoenmüller, Verena, 2015. "Consumers' reaction to fair trade motivated price increases," Journal of Retailing and Consumer Services, Elsevier, vol. 24(C), pages 79-84.
    13. Janus, Thorsten, 2012. "Natural resource extraction and civil conflict," Journal of Development Economics, Elsevier, vol. 97(1), pages 24-31.
    14. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
    15. De Luca, Giacomo & Sekeris, Petros G. & Vargas, Juan F., 2018. "Beyond divide and rule: Weak dictators, natural resources and civil conflict," European Journal of Political Economy, Elsevier, vol. 53(C), pages 205-221.
    16. 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.
    17. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    18. Bonroy, Olivier & Lemarié, Stéphane, 2012. "Downstream labeling and upstream price competition," European Economic Review, Elsevier, vol. 56(3), pages 347-360.
    19. Antoine Gervais, 2015. "Product quality and firm heterogeneity in international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 48(3), pages 1152-1174, August.
    20. Olivier Bonroy & Stephane Lemarié, 2012. "Downstream labeling and upstream price competition," Post-Print hal-01340829, HAL.
    21. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
    22. Antoine Gervais, 2015. "Product quality, firm heterogeneity and trade liberalization," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(4), pages 523-541, June.
    23. repec:fth:prinin:362 is not listed on IDEAS
    24. Katharina Wick & Erwin Bulte, 2006. "Contesting resources – rent seeking, conflict and the natural resource curse," Public Choice, Springer, vol. 128(3), pages 457-476, September.
    25. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
    26. James D. Fearon, 2004. "Why Do Some Civil Wars Last So Much Longer than Others?," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 275-301, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stoop, Nik & Verpoorten, Marijke & van der Windt, Peter, 2019. "Artisanal or industrial conflict minerals? Evidence from Eastern Congo," World Development, Elsevier, vol. 122(C), pages 660-674.
    2. Jeffrey R. Bloem, 2019. "Good Intentions Gone Bad? The Dodd-Frank Act and Conflict in Africa’s Great Lakes Region," HiCN Working Papers 300, Households in Conflict Network.
    3. Hans-Böckler-Stiftung & Deutscher Gewerkschaftsbund (ed.), 2001. "Welthandelsorganisation und Sozialstandards: Dokumentation der DGB-Tagung am 28. Mai 2001 in Brüssel," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 60, number 60.
    4. Nancy H. Chau & Ravi Kanbur, 2006. "The Race to the Bottom, from the Bottom," Economica, London School of Economics and Political Science, vol. 73(290), pages 193-228, May.
    5. Yokessa, Maïmouna & Marette, Stéphan, 2019. "A Review of Eco-labels and their Economic Impact," International Review of Environmental and Resource Economics, now publishers, vol. 13(1-2), pages 119-163, April.
    6. Irineu Evangelista de Carvalho Filho, 2012. "Household Income as a Determinant of Child Labor and School Enrollment in Brazil: Evidence from a Social Security Reform," Economic Development and Cultural Change, University of Chicago Press, vol. 60(2), pages 399-435.
    7. Tom Ogwang & Frank Vanclay & Arjan van den Assem, 2019. "Rent-Seeking Practices, Local Resource Curse, and Social Conflict in Uganda’s Emerging Oil Economy," Land, MDPI, vol. 8(4), pages 1-14, March.
    8. Marco Manacorda, 2006. "Child Labor and the Labor Supply of Other Household Members: Evidence from 1920 America," American Economic Review, American Economic Association, vol. 96(5), pages 1788-1801, December.
    9. Mehrdad Vahabi, 2017. "A critical survey of the resource curse literature through the appropriability lens," CEPN Working Papers 2017-14, Centre d'Economie de l'Université de Paris Nord.
    10. Bernhard Boockmann, 2003. "Mixed Motives: An Empirical Analysis of ILO Roll-Call Voting," Constitutional Political Economy, Springer, vol. 14(4), pages 263-285, December.
    11. Vandenbussche, Hylke & Aw-Roberts, Bee Yan & Lee, Yi, 2018. "Decomposing Firm-Product Appeal: How important is Consumer Taste?," CEPR Discussion Papers 12707, C.E.P.R. Discussion Papers.
    12. Rodrik, Dani, 2007. "How to Save Globalization from its Cheerleaders," CEPR Discussion Papers 6494, C.E.P.R. Discussion Papers.
    13. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    14. Christian Hubert Ebeke, 2010. "The Effect of Remittances on Child Labor: Cross-Country Evidence," Economics Bulletin, AccessEcon, vol. 30(1), pages 351-364.
    15. Michiel Kok & Richard Nahuis & Albert de Vaal, 2004. "On labour standards and free trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(2), pages 137-158.
    16. Waqar Wadho & Sadia Hussain, 2023. "Ethnic diversity, concentration of political power and the curse of natural resources," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 113-137, April.
    17. Mr. Chris Papageorgiou & Fidel Perez-Sebastian & Mr. Nikola Spatafora, 2019. "Quality Upgrading and Export Performance in the Asian Growth Miracle," IMF Working Papers 2019/259, International Monetary Fund.
    18. Matthias Doepke & Fabrizio Zilibotti, 2010. "Do international labor standards contribute to the persistence of the child-labor problem?," Journal of Economic Growth, Springer, vol. 15(1), pages 1-31, March.
    19. Osiris Jorge Parcero & Elissaios Papyrakis, 2024. "Income inequality and the oil resource curse," Papers 2401.04046, arXiv.org.
    20. Ebeke, Christian Hubert, 2012. "The power of remittances on the international prevalence of child labor," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 452-462.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:28:y:2020:i:2:p:395-407. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.