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Natural Resources, Social Conflict and Poverty Trap

  • Davide Fiaschi

The paper analyses a model where the fight for the appropriation of rents from natural resources between two groups leads to multiple equilibria. The possibility to be trapped into the low-income equilibrium, characterized by strong social conflict (civil war) and stagnation of income, increases with the weakness of political institutions, the population growth rate, the amount of rents from natural resources and the rate of depletion of natural resources and decreases with the level of per capita income, the investment rate and the length of life expectancy of individuals. The size of minority has an ambiguous effect, widening the range of income leading to low-income equilibrium, but also raising incentives to reach an agreement, i.e. a social contract, without any social conflict. Empirical evidence appears to support these findings.

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File URL: http://www.ec.unipi.it/documents/Ricerca/papers/2009-82.pdf
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Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2009/82.

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Date of creation: 20 Apr 2009
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Handle: RePEc:pie:dsedps:2009/82
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  1. Paul Collier & Jan Willem Gunning, 1998. "Explaining African economic performance," Economics Series Working Papers WPS/1997-02.2, University of Oxford, Department of Economics.
  2. Markus Bruckner, 2009. "Population Size and Civil Conflict Risk: Is There A Causal Link?," Working Papers in Economics 211, Universitat de Barcelona. Espai de Recerca en Economia.
  3. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
  4. Grossman, Herschel I & Kim, Minseong, 1996. " Predation and Accumulation," Journal of Economic Growth, Springer, vol. 1(3), pages 333-50, September.
  5. Mehlum, Halvor & Moene, Karl & Torvik, Ragnar, 2003. "Predator or prey?: Parasitic enterprises in economic development," European Economic Review, Elsevier, vol. 47(2), pages 275-294, April.
  6. David, DE LA CROIX & Davide, DOTTORI, 2007. "Easter Island’s Collapse : A Tale of a Population Race," Discussion Papers (ECON - Département des Sciences Economiques) 2007005, Université catholique de Louvain, Département des Sciences Economiques.
  7. Olsson, Ola, 2003. "Conflict Diamonds," Working Papers in Economics 86, University of Gothenburg, Department of Economics, revised 30 Nov 2003.
  8. Muthoo, Abhinay, 2004. "A model of the origins of basic property rights," Games and Economic Behavior, Elsevier, vol. 49(2), pages 288-312, November.
  9. Gonzalez, Francisco M., 2007. "Effective property rights, conflict and growth," Journal of Economic Theory, Elsevier, vol. 137(1), pages 127-139, November.
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