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Beyond divide and rule: weak dictators, natural resources and civil conflict

  • Giacomo De Luca

    ()

  • Petros G. Sekeris

    ()

  • Juan F. Vargas

    ()

We propose a model where an autocrat rules over an ethnically divided society. The dictator selects the tax rate over domestic production and the nation's natural resources to maximize his rents under the threat of a regime-switching revolution. We show that a weak ruler may let the country plunge in civil war to increase his personal rents. Inter-group fighting weakens potential opposition to the ruler, thereby allowing him to increase fiscal pressure. We show that the presence of natural resources exacerbatesthe incentives of the ruler to promote civil conflict for his own profit, especially if the resources are unequally distributed across ethnic groups. We validate the main predictions of the model using cross-country data over the period 1960-2007, and show that our empirical results are not likely to be driven by omitted observable determinants of civil war incidence or by unobservable country-specific heterogeneity.

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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 008893.

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Length: 37
Date of creation: 09 Aug 2011
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Handle: RePEc:col:000092:008893
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  1. Lorenzo Rocco & Zié Ballo, 2008. "Provoking a civil war," Public Choice, Springer, vol. 134(3), pages 347-366, March.
  2. Francesco Caselli & Wilbur John Coleman II, 2008. "On the Theory of Ethnic Conflict," CEDI Discussion Paper Series 08-08, Centre for Economic Development and Institutions(CEDI), Brunel University.
  3. Joan Esteban & Massimo Morello & Dominic Rohner, 2010. "Strategic Mass Killings," OxCarre Working Papers 045, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  4. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
  5. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series 1, Villanova School of Business Department of Economics and Statistics.
  6. Giacomo Luca & Petros Sekeris, 2012. "Land inequality and conflict intensity," Public Choice, Springer, vol. 150(1), pages 119-135, January.
  7. Ola Olsson, 2004. "Conflict Diamonds," DEGIT Conference Papers c009_013, DEGIT, Dynamics, Economic Growth, and International Trade.
  8. Georgy Egorov & Konstantin Sonin, 2005. "Dictators and Their Viziers: Agency Problems in Dictatorships," William Davidson Institute Working Papers Series wp735, William Davidson Institute at the University of Michigan.
  9. Petros G. Sekeris, 2010. "Endogenous Elites: Power Structure and Patron-Client Relationships," Working Papers 1008, University of Namur, Department of Economics.
  10. Fearon, James D. & Laitin, David D., 2000. "Violence and the Social Construction of Ethnic Identity," International Organization, Cambridge University Press, vol. 54(04), pages 845-877, September.
  11. Anne Boschini & Anders Olofsg�rd, 2007. "Foreign aid: An instrument for fighting communism?," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 622-648.
  12. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2008. "Coalition Formation in Non-Democracies," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 987-1009.
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