A New Resource Curse: How Externalities and Governance Shape Social Conflict

Renard Sexton
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Renard Sexton: Princeton University

Empirical Studies of Conflict Project (ESOC) Working Papers from Empirical Studies of Conflict Project

Abstract: Natural resource extraction is increasingly important in many developing countries, but harmful externalities threaten the viability of the sector. This paper articulates and finds evidence for a new ‘resource curse,’ whereby negative side effects from resource extraction increase social conflict in nearby communities. Using micro-level data on extractive commodities, water pollution, children’s and livestock health, local government quality and mining-related social conflict in Peru, this study shows that rising international prices increase conflict, pollution and negative health effects, but not public spending in mining areas. These effects disappear when local government is high quality, indicating that good governance can temper the effects of this new resource curse.

Keywords: Peru; Conflict; Natural resources; Externalities; Governance (search for similar items in EconPapers)
JEL-codes: D74 L72 O13 Q34 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-dev, nep-env and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:pri:esocpu:9

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