IDEAS home Printed from https://ideas.repec.org/p/mar/magkse/201838.html
   My bibliography  Save this paper

Sourcing from Conflict Regions: Policies to Improve Transparency in International Supply Chains

Author

Listed:
  • Julika Herzberg

    () (Aachen university)

  • Oliver Lorz

    () (Aachen university)

Abstract

In this paper, we set up a theoretical model to study how unilateral policies aimed at improving transparency for consumers concerning the source of certain raw materials influence prices, illegal mining activities and welfare. The model distinguishes two regions in the world, North and South. Firms in the North import natural resources from the South to produce final consumption goods. In one of the countries, in the South, local groups attempt to access natural resources, which results in rent seeking conflicts with the government and illegal mining. We find that a unilateral embargo against the conflict country as well as certification of legal mines can reduce rent seeking and illegal mining with different welfare consequences in the countries involved.

Suggested Citation

  • Julika Herzberg & Oliver Lorz, 2018. "Sourcing from Conflict Regions: Policies to Improve Transparency in International Supply Chains," MAGKS Papers on Economics 201838, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201838
    as

    Download full text from publisher

    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2018/38-2018_herzberg.pdf
    File Function: First 201838
    Download Restriction: no

    References listed on IDEAS

    as
    1. Dominic P. Parker & Bryan Vadheim, 2017. "Resource Cursed or Policy Cursed? US Regulation of Conflict Minerals and Violence in the Congo," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 1-49.
    2. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    3. repec:eee:poleco:v:53:y:2018:i:c:p:205-221 is not listed on IDEAS
    4. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
    5. De Luca, Giacomo & Sekeris, Petros G. & Vargas, Juan F., 2018. "Beyond divide and rule: Weak dictators, natural resources and civil conflict," European Journal of Political Economy, Elsevier, vol. 53(C), pages 205-221.
    6. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    7. Bonroy, Olivier & Lemarié, Stéphane, 2012. "Downstream labeling and upstream price competition," European Economic Review, Elsevier, vol. 56(3), pages 347-360.
    8. Olivier Bonroy & Stephane Lemarié, 2012. "Downstream labeling and upstream price competition," Post-Print hal-01340829, HAL.
    9. Antoine Gervais, 2015. "Product quality and firm heterogeneity in international trade," Canadian Journal of Economics, Canadian Economics Association, vol. 48(3), pages 1152-1174, August.
    10. Antoine Gervais, 2015. "Product quality, firm heterogeneity and trade liberalization," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(4), pages 523-541, June.
    11. James D. Fearon, 2004. "Why Do Some Civil Wars Last So Much Longer than Others?," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 275-301, May.
    12. Katharina Wick & Erwin Bulte, 2006. "Contesting resources – rent seeking, conflict and the natural resource curse," Public Choice, Springer, vol. 128(3), pages 457-476, September.
    13. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
    14. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    15. Eleonora Nillesen & Erwin Bulte, 2014. "Natural Resources and Violent Conflict," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 69-83, October.
    16. Christopher K Butler & Scott Gates, 2012. "African range wars: Climate, conflict, and property rights," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(1), pages 23-34, January.
    17. Janus, Thorsten, 2012. "Natural resource extraction and civil conflict," Journal of Development Economics, Elsevier, vol. 97(1), pages 24-31.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mar:magkse:201838. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernd Hayo). General contact details of provider: http://edirc.repec.org/data/vamarde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.