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Complementarity and the resource curse

  • Arthur Silve

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

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    This paper discusses how the economic structure and asset ownership shape economic and political outcomes. Using a simple model of the productive sector, I provide theoretical evidence that complementarities between productive assets reduce the stakes of political competition, and therefore reduce the intensity of the conflict over political power. In particular, these results provide a theoretical explanation for the frequent conflicts associated with abundant mineral resources. They are valid in a democratic setting, where this competition is electoral, but also in any other setting, where competition may be of a more violent nature. I then extend this analysis to show that complementarity of productive assets positively influences the willingness of elite groups to invest in property rights institutions, thus providing an economic explanation for why some countries have endogenously developed a context more favorable to business than others.

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    Paper provided by HAL in its series PSE Working Papers with number halshs-00728703.

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    Date of creation: Sep 2012
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    Handle: RePEc:hal:psewpa:halshs-00728703
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    13. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
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