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Secession with Natural Resources

Author

Listed:
  • Dhillon, Amrita

    (Kings College,London,and CAGE, University of Warwick)

  • Krishnan, Pramila

    (University of Oxford and CEPR)

  • Patnam, Manasa

    (CREST-ENSAE)

  • Perroni, Carlo

    (University of Warwick, CAGE and CESIfo)

Abstract

We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited are relatively larger proportion of natural resources. We argue that these patterns reflect how political reorganisation affected the quality of state governance of natural resources. We describe a model of collusion between state politicians and resource rent recipients that can account for the relationships we see in the data between natural resource abundance and post-break up local outcomes.

Suggested Citation

  • Dhillon, Amrita & Krishnan, Pramila & Patnam, Manasa & Perroni, Carlo, 2020. "Secession with Natural Resources," The Warwick Economics Research Paper Series (TWERPS) 1240, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1240
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    1. Asongu, Simplice A & Odhiambo, Nicholas M, 2022. "The paradox of governance and natural resource rents in Sub-Saharan Africa," Working Papers 29008, University of South Africa, Department of Economics.
    2. Andersen, Jørgen Juel & Sørensen, Rune Jørgen, 2022. "The zero-rent society: Evidence from hydropower and petroleum windfalls in Norwegian local governments," Journal of Public Economics, Elsevier, vol. 209(C).

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    More about this item

    Keywords

    Natural Resources and Economic Performance ; Political Secession ; Fiscal Federalism;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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