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Natural resource extraction and civil conflict

  • Janus, Thorsten

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.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 97 (2012)
Issue (Month): 1 ()
Pages: 24-31

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Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:24-31
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  1. Markus Bruckner & Antonio Ciccone, 2010. "International Commodities Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Working Papers 1008, BBVA Bank, Economic Research Department.
  2. 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.
  3. Markus Brückner & Antonio Ciccone, 2007. "International commodity prices, growth and the outbreak of Civil War in Sub-Saharan Africa," Economics Working Papers 1053, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 2009.
  4. Sanchez-Pages, Santiago, 2006. "On the social efficiency of conflict," Economics Letters, Elsevier, vol. 90(1), pages 96-101, January.
  5. Chassang, Sylvain & Miquel, Gerard Padró i, 2009. "Economic Shocks and Civil War," Quarterly Journal of Political Science, now publishers, vol. 4(3), pages 211-228, October.
  6. Christa N. Brunnschweiler & Erwin Bulte, 2008. "Natural Resources and Violent Conflict: Resource Abundance, Dependence and the Onset of Civil Wars," CER-ETH Economics working paper series 08/78, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  7. Bulte, Erwin & Wick, Katharina, 2005. "Contesting Resources - Rent Seeking, Conflict and the Natural Resource Curse," Proceedings of the German Development Economics Conference, Kiel 2005 36, Verein für Socialpolitik, Research Committee Development Economics.
  8. Blattman, Christopher & Miguel, Edward, 2009. "Civil War," Center for International and Development Economics Research, Working Paper Series qt90n356hs, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  9. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA.
  10. Besley, Timothy J. & Persson, Torsten, 2008. "The Incidence of Civil War: Theory and Evidence," CEPR Discussion Papers 7101, C.E.P.R. Discussion Papers.
  11. Deininger, Klaus, 2003. "Causes and consequences of civil strife - micro-level evidence from Uganda," Policy Research Working Paper Series 3045, The World Bank.
  12. Stefano DellaVigna & Eliana La Ferrara, 2007. "Detecting Illegal Arms Trade," NBER Working Papers 13355, National Bureau of Economic Research, Inc.
  13. Takamasa Akiyama & John Baffes & Donald Larson & Panos Varangis, 2001. "Commodity Market Reforms : Lessons of Two Decades," World Bank Publications, The World Bank, number 13852.
  14. Verwimp, Philip, 2003. "The political economy of coffee, dictatorship, and genocide," European Journal of Political Economy, Elsevier, vol. 19(2), pages 161-181, June.
  15. Rubin, Barnett R., 2000. "The Political Economy of War and Peace in Afghanistan," World Development, Elsevier, vol. 28(10), pages 1789-1803, October.
  16. Bornhorst, Fabian & Gupta, Sanjeev & Thornton, John, 2009. "Natural resource endowments and the domestic revenue effort," European Journal of Political Economy, Elsevier, vol. 25(4), pages 439-446, December.
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