Ola Olsson ()
DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade
’Conflict diamonds’ refers to the fatal role that diamonds are believed to have played in several African conflicts. The article analyzes the impact of diamond abundance on economic growth in light of the broader, previously discovered empirical finding of a ’curse of natural resources’. By extending the theory of appropriative conflict, a predator-prey game is outlined in which a rebel chooses between peaceful production and predation on natural resources controlled by the ruler. It is shown that whereas an increase in natural resources will increase the ruler’s public utility investments, it might also lead to a crowding-out of labor from the formal sector to the appropriative struggle, which depresses growth. As predicted by the model, a cross-country regression analysis suggests that diamond abundance has a negative relationship with economic growth in countries with weak institutions.
Keywords: diamonds; appropriative conflict; curse of natural resources; growth; predation. (search for similar items in EconPapers)
JEL-codes: O13 O40 Q32 (search for similar items in EconPapers)
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Journal Article: Conflict diamonds (2007)
Working Paper: Conflict Diamonds (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:deg:conpap:c009_013
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