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Natural Resources, Conflict and Democratization

  • Enrique Calfucura


    (Facultad de Economía y Empresa, Universidad Diego Portales)

This paper explores the effect of natural resource abundance on political stability. We extend the work of Acemoglu and Robinson (2006) and Morrison (2007) to analyze how natural resource abundance affects the threat of revolution and democratization. The model is able to reproduce the stylized facts associated with the political resource curse. Natural resource abundance is explicitly considered into the constraint faced by the elite and the poor when they take strategies to maximize their own welfare. Unlike Morrison (2007), we do not support the claim that natural resource abundance always helps non-democratic regimes to prevent democratization or revolution. In the case of democracy, natural resource rents have to be high enough to prevent revolution. Moreover, we find that inefficiencies and repression are necessary for the elite to maintain the control of political power. Under threat of revolution, the elite will democratize only if the level of natural resource rent is high enough to avoid revolution once democracy is implemented.

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Paper provided by Facultad de Economía y Empresa, Universidad Diego Portales in its series Working Papers with number 30.

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Date of creation: Dec 2011
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Handle: RePEc:ptl:wpaper:30
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  1. Frederick van der Ploeg & Dominic Rohner, 2010. "War and natural resource exploitation," IEW - Working Papers 481, Institute for Empirical Research in Economics - University of Zurich.
  2. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  3. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA.
  4. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
  5. Acemoglu, Daron & Robinson, James A, 1999. "A Theory of Political Transitions," CEPR Discussion Papers 2277, C.E.P.R. Discussion Papers.
  6. Kevin Morrison, 2007. "Natural resources, aid, and democratization: A best-case scenario," Public Choice, Springer, vol. 131(3), pages 365-386, June.
  7. Anca Cotet & Kevin K. Tsui, 2010. "Oil and Conflict: What Does the Cross-Country Evidence Really Show?," Working Papers 201002, Ball State University, Department of Economics, revised Mar 2010.
  8. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
  9. Frederick Van der Ploeg & Steven Poelhekke, 2010. "The Pungent Smell of "Red Herrings": Subsoil Assets, Rents, Volatility and the Resource Curse," CESifo Working Paper Series 3013, CESifo Group Munich.
  10. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
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