Resource Rents, Power, and Political Stability

Kjetil Bjorvatn and Mohammad Reza Farzanegan (farzanegan@uni-marburg.de)

No 4727, CESifo Working Paper Series from CESifo

Abstract: We study the association between resource rents and political stability, highlighting the importance of the distribution of political power as a mediating factor. We present a simple theoretical model showing that increased rents are likely to be positively associated with the stability of a powerful incumbent while destabilizing a less powerful incumbent. Our empirical analysis confirms this prediction: Using panel data for more than 120 countries from 1984-2009, our results show that rents can promote political stability, but only when the political power is sufficiently concentrated. Indeed, if the incumbent is sufficiently weak, rents fuel instability. Our main results hold when we control for time varying common shocks, country fixed effects and various additional covariates.

Keywords: resource rent; political power; political stability; conflict (search for similar items in EconPapers)
JEL-codes: A10 C50 E60 O11 O20 Q30 Q48 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Resource rents, power, and political stability (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4727

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