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Natural resources and income inequality: The role of ethnic divisions

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  • Fum, Ruikang Marcus
  • Hodler, Roland

Abstract

We hypothesize that natural resources raise income inequality in ethnically polarized societies, but reduce income inequality in ethnically homogenous societies; and we present empirical evidence in support of this hypothesis.

Suggested Citation

  • Fum, Ruikang Marcus & Hodler, Roland, 2010. "Natural resources and income inequality: The role of ethnic divisions," Economics Letters, Elsevier, vol. 107(3), pages 360-363, June.
  • Handle: RePEc:eee:ecolet:v:107:y:2010:i:3:p:360-363
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    References listed on IDEAS

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    1. José G. Montalvo & Marta Reynal-Querol, 2005. "Ethnic Polarization, Potential Conflict, and Civil Wars," American Economic Review, American Economic Association, vol. 95(3), pages 796-816, June.
    2. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    3. De Gregorio, Jose & Lee, Jong-Wha, 2002. "Education and Income Inequality: New Evidence from Cross-Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
    4. Francesco Caselli & Wilbur John Coleman II, 2013. "On The Theory Of Ethnic Conflict," Journal of the European Economic Association, European Economic Association, vol. 11, pages 161-192, January.
    5. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
    6. Spilimbergo, Antonio & Londono, Juan Luis & Szekely, Miguel, 1999. "Income distribution, factor endowments, and trade openness," Journal of Development Economics, Elsevier, vol. 59(1), pages 77-101, June.
    7. Christa N Brunnschweiler & Erwin H Bulte, 2009. "Fractionalization and the Fight over Natural Resources: Ethnicity, language, religion, and the onset of civil war," OxCarre Working Papers 017, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    8. Leamer, Edward E. & Maul, Hugo & Rodriguez, Sergio & Schott, Peter K., 1999. "Does natural resource abundance increase Latin American income inequality?," Journal of Development Economics, Elsevier, vol. 59(1), pages 3-42, June.
    9. Alberto Chong & Mark Gradstein, 2007. "Inequality and Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 454-465, August.
    10. Benedikt Goderis & Samuel W. Malone, 2011. "Natural Resource Booms and Inequality: Theory and Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 388-417, June.
    11. van der Ploeg, Frederick, 2006. "Challenges and Opportunities for Resource Rich Economies," CEPR Discussion Papers 5688, C.E.P.R. Discussion Papers.
    12. Sylwester, Kevin, 2004. "A note on geography, institutions, and income inequality," Economics Letters, Elsevier, vol. 85(2), pages 235-240, November.
    13. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    14. José Garcia Montalvo & Marta Reynal-Querol, 2004. "Ethnic polarization, potential conflict and civil wars," Economics Working Papers 770, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2005.
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    Cited by:

    1. Addison,Tony & Boly,Amadou & Mveyange,Anthony Francis, 2017. "The impact of mining on spatial inequality recent evidence from Africa," Policy Research Working Paper Series 7960, The World Bank.
    2. repec:eee:deveco:v:127:y:2017:i:c:p:250-268 is not listed on IDEAS
    3. Farzanegan, Mohammad Reza & Krieger, Tim, 2017. "The response of income inequality to positive oil rents shocks in Iran: Implications for the post-sanction period," Discussion Paper Series 2017-04, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    4. Mohammad Reza Farzanegan & Mohammad Habibpour, 2014. "Direct Distribution of Rents and the Resource Curse in Iran: A Micro-econometric Analysis," CESifo Working Paper Series 4824, CESifo Group Munich.
    5. repec:eee:eneeco:v:66:y:2017:i:c:p:35-42 is not listed on IDEAS
    6. van der Ploeg, Frederick, 2006. "Challenges and Opportunities for Resource Rich Economies," CEPR Discussion Papers 5688, C.E.P.R. Discussion Papers.
    7. Jiří Hasman & Josef Novotný, 2015. "Cross-National Variation in Income Inequality and its Determinants: An Application of Bayesian Model Averaging on a New Standardized Inequality Data Set," Prague Economic Papers, University of Economics, Prague, vol. 2015(2), pages 211-224.
    8. Islam, Md. Rabiul & Madsen, Jakob B. & Raschky, Paul A., 2015. "Gold and silver mining in the 16th and 17th centuries, land titles and agricultural productivity," European Journal of Political Economy, Elsevier, vol. 39(C), pages 150-166.
    9. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    10. M. Yusof Saari & Erik Dietzenbacher & Bart Los, 2014. "Income Distribution across Ethnic Groups in Malaysia: Results from a New Social Accounting Matrix," Asian Economic Journal, East Asian Economic Association, vol. 28(3), pages 259-278, September.
    11. Nguyen, Trang T.T., 2016. "Tax administration resources and Income inequality," MPRA Paper 74820, University Library of Munich, Germany.
    12. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    13. Parcero, Osiris J. & Papyrakis, Elissaios, 2016. "Income inequality and the oil resource curse," Resource and Energy Economics, Elsevier, vol. 45(C), pages 159-177.
    14. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
    15. Mohammad Reza Farzanegan & Tim Krieger, 2018. "Oil Rents Shocks and Inequality in Iran," CESifo Working Paper Series 6876, CESifo Group Munich.
    16. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: natural resources and public spending on health," IOB Working Papers 2014.01, Universiteit Antwerpen, Institute of Development Policy (IOB).

    More about this item

    Keywords

    Natural resources Inequality Ethnic polarization Resource curse;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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