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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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File URL: http://www.sciencedirect.com/science/article/pii/S0304387811000095
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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
DOI: 10.1016/j.jdeveco.2011.01.006
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  3. Timothy Besley & Torsten Persson, 2009. "The Incidence of Civil War: Theory and Evidence," STICERD - Economic Organisation and Public Policy Discussion Papers Series 005, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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  18. Philip Verwimp, 2003. "The political economy of coffee, dictatorship and genocide," ULB Institutional Repository 2013/223341, ULB -- Universite Libre de Bruxelles.
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