Natural-Resource Rents and Internal Conflicts - Can Decentralization Lift the Curse?

Mohammad Reza Farzanegan (farzanegan@uni-marburg.de), Christian Lessmann and Gunther Markwardt

No 4180, CESifo Working Paper Series from CESifo

Abstract: We study how natural-resource rents affect the risk of internal conflict within countries and how the federal structure of countries influences this relationship. Natural-resource abundance may induce excessive rent-seeking and thus increase the risk of internal conflict. Fiscal and political decentralization as an institutional arrangement for rent-sharing and political codetermination of regions within a country may limit the destructive effect of the natural-resource rents on internal stability. Using cross-country and panel data covering the period 1984-2004 from more than 90 countries, we find evidence that natural-resource rents indeed increase the risk of internal conflict, but this relationship is significantly mitigated by decentralization.

Keywords: natural resources; risk of conflict; decentralization (search for similar items in EconPapers)
JEL-codes: H77 P48 Q34 Q38 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Natural resource rents and internal conflicts: Can decentralization lift the curse? (2018)
Working Paper: Natural-resource rents and internal conflicts - Can decentralization lift the curse? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4180

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