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Natural Resources, Conflict and Democratization

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  • Enrique Calfucura

    () (Facultad de Economía y Empresa, Universidad Diego Portales)

Abstract

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.

Suggested Citation

  • Enrique Calfucura, 2011. "Natural Resources, Conflict and Democratization," Working Papers 30, Facultad de Economía y Empresa, Universidad Diego Portales.
  • Handle: RePEc:ptl:wpaper:30
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    References listed on IDEAS

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    1. 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.
    2. van der Ploeg, Frederick & Poelhekke, Steven, 2010. "The pungent smell of "red herrings": Subsoil assets, rents, volatility and the resource curse," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 44-55, July.
    3. 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 222-279, April.
    4. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
    5. 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.
    6. Kevin Morrison, 2007. "Natural resources, aid, and democratization: A best-case scenario," Public Choice, Springer, vol. 131(3), pages 365-386, June.
    7. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    8. Anca M. Cotet & Kevin K. Tsui, 2013. "Oil and Conflict: What Does the Cross Country Evidence Really Show?," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 49-80, January.
    9. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    10. 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.
    11. repec:hrv:faseco:30747160 is not listed on IDEAS
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