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Resource Dependence, Economic Performance, and Political Stability

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  • Thad Dunning

    (Department of Political Science, University of California, Berkeley)

Abstract

In many resource-dependent states, elites may face an important trade-off between the economic benefits of diversification and the possibility for future political competition that diversification may engender. However, distinctive features of global resource markets and national political economies may make diversification more or less attractive to political elites. The author argues that in three cases which illustrate the equilibrium paths of the game-theoretic model developed here—postindependence Bostwana, Mobutu’s Zaire, and Suharto’s Indonesia—three variables influenced elites’ incentives for diversification and thereby shaped outcomes along the dimensions of political stability and economic performance: the world market structure for the resource, the degree of societal opposition to elites, and the prior development of the nonresource private sector. These countries’ varied paths from resource wealth to political and economic outcomes suggest the need for conditional theories of the resource curse.

Suggested Citation

  • Thad Dunning, 2005. "Resource Dependence, Economic Performance, and Political Stability," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 451-482, August.
  • Handle: RePEc:sae:jocore:v:49:y:2005:i:4:p:451-482
    DOI: 10.1177/0022002705277521
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    References listed on IDEAS

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    3. Mayer, Andreas & Haas, Willi & Wiedenhofer, Dominik, 2017. "How Countries' Resource Use History Matters for Human Well-being – An Investigation of Global Patterns in Cumulative Material Flows from 1950 to 2010," Ecological Economics, Elsevier, vol. 134(C), pages 1-10.
    4. Vusal Musayev, 2016. "Externalities in Military Spending and Growth: The Role of Natural Resources as a Channel through Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 378-391, June.
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    6. Sylvain Dessy & Stéphane Pallage & Désiré Vencatachellum, 2012. "The Political Economy of Social Inclusion," Cahiers de recherche 1202, CIRPEE.
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    8. Bajo-Buenestado, Raúl, 2018. "Relationship-specificity, incomplete contracts, and the pattern of trade: A comment on the role of natural resources," Energy Economics, Elsevier, vol. 75(C), pages 410-422.
    9. Omgba, Luc Désiré, 2014. "Institutional foundations of export diversification patterns in oil-producing countries," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1052-1064.
    10. Jose Cuesta & Syed Mansoob Murshed, 2012. "On the micro-foundations of contract versus conflict with implications for international peace-making," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 2(2), pages 1250009-125.
    11. Wegenast, Tim, 2013. "The Impact of Fuel Ownership on Intrastate Violence," GIGA Working Papers 225, GIGA German Institute of Global and Area Studies.
    12. Wegenast, Tim, 2010. "Inclusive Institutions and the Onset of Internal Conflict in Resource-rich Countries," GIGA Working Papers 126, GIGA German Institute of Global and Area Studies.
    13. Wiig, Arne & Kolstad, Ivar, 2012. "If diversification is good, why don't countries diversify more? The political economy of diversification in resource-rich countries," Energy Policy, Elsevier, vol. 40(C), pages 196-203.
    14. Djimeu, Eric W. & Omgba, Luc Désiré, 2019. "Oil windfalls and export diversification in oil-producing countries: Evidence from oil booms," Energy Economics, Elsevier, vol. 78(C), pages 494-507.
    15. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    16. Rafaela PIZARRO-BARCELÓ & Angel GARCIA-ORTIZ, 2010. "Banking and Monetary Transmission Mechanism in Morocco," EcoMod2010 259600135, EcoMod.
    17. Murillo, Maria Victoria & Scartascini, Carlos & Tommasi, Mariano, 2008. "The Political Economy of Productivity: Actors, Arenas, and Policies. A Framework of Analysis," IDB Publications (Working Papers) 1642, Inter-American Development Bank.
    18. Naazneen H. Barma, 2014. "The Rentier State at Work: Comparative Experiences of the Resource Curse in East Asia and the Pacific," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(2), pages 257-272, May.
    19. Luc Désiré Omgba, 2016. "On the mobilization of domestic resources in oil countries: The role of historical factors," WIDER Working Paper Series 154, World Institute for Development Economic Research (UNU-WIDER).

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