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Natural resource extraction and civil conflict

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  • Janus, Thorsten

Abstract

Based on evidence linking natural resources to civil conflict, this paper studies two armed groups fighting to control a resource and possibly a second prize. Labor is used in the agricultural, resource extraction and conflict sectors, and the groups also buy a capital input to conflict subject to the constraint that capital spending cannot exceed resource earnings. I find that exogenous shocks can have different effects on conflict intensity depending on whether the credit constraint binds. In particular, international policies to ban natural resource exports from conflict zones (e.g. ‘blood diamonds’), raise agricultural productivity or limit the import of weapons will limit conflict intensity if the credit constraint binds. However, if the credit constraint does not bind, then the first two policies promote conflict, and so could even the third policy. The results therefore suggest some caution in international policymaking.

Suggested Citation

  • Janus, Thorsten, 2012. "Natural resource extraction and civil conflict," Journal of Development Economics, Elsevier, vol. 97(1), pages 24-31.
  • Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:24-31
    DOI: 10.1016/j.jdeveco.2011.01.006
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    References listed on IDEAS

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    Cited by:

    1. Markwardt, Gunther & Farzanegan, Mohammad & Leßmann, Christian, 2013. "Natural-resource rents and internal conflicts - Can decentralization lift the curse?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79940, Verein für Socialpolitik / German Economic Association.
    2. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    3. Moshik Lavie & Christophe Muller, 2011. "Incentives and Survival in Violent Conflicts," Research Working Papers 47, MICROCON - A Micro Level Analysis of Violent Conflict.
    4. Rodriguez Acosta, Mauricio, 2016. "Essays in political economy and resource economic : A macroeconomic approach," Other publications TiSEM 1e39ef1b-43a2-4f95-892c-6, Tilburg University, School of Economics and Management.
    5. Carmignani, Fabrizio, 2013. "Development outcomes, resource abundance, and the transmission through inequality," Resource and Energy Economics, Elsevier, vol. 35(3), pages 412-428.
    6. Oliver Vanden Eynde, 2015. "Targets of violence: evidence from India's Naxalite conflict," PSE Working Papers halshs-01202689, HAL.
    7. Hasan, Md Didarul & Lahiri, Sajal, 2015. "A two-period model of natural resources and inter-country conflicts: Effects of trade sanctions," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 5(2), pages 76-100.

    More about this item

    Keywords

    Resource curse; Resource extraction; Conflict; Sanctions; Kimberley Process;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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