Natural Resources, Social Conflict and Poverty Trap
Davide Fiaschi ()
Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy
The paper analyses a model where the fight for the appropriation of rents from natural resources between two groups leads to multiple equilibria. The possibility to be trapped into the low-income equilibrium, characterized by strong social conflict (civil war) and stagnation of income, increases with the weakness of political institutions, the population growth rate, the amount of rents from natural resources and the rate of depletion of natural resources and decreases with the level of per capita income, the investment rate and the length of life expectancy of individuals. The size of minority has an ambiguous effect, widening the range of income leading to low-income equilibrium, but also raising incentives to reach an agreement, i.e. a social contract, without any social conflict. Empirical evidence appears to support these findings.
Keywords: natural resources; social conflict; poverty trap; institutions; civil war (search for similar items in EconPapers)
JEL-codes: O11 O43 Q34 D74 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-env
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2009/82
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