Natural Resources, Conflict and Democratization

Enrique Calfucura

No 30, Working Papers from Facultad de Economía y Empresa, Universidad Diego Portales

Abstract: This paper explores the effect of natural resource abundance on political stability. We extend the work of Acemoglu and Robinson (2006) and Morrison (2007) to analyze how natural resource abundance affects the threat of revolution and democratization. The model is able to reproduce the stylized facts associated with the political resource curse. Natural resource abundance is explicitly considered into the constraint faced by the elite and the poor when they take strategies to maximize their own welfare. Unlike Morrison (2007), we do not support the claim that natural resource abundance always helps non-democratic regimes to prevent democratization or revolution. In the case of democracy, natural resource rents have to be high enough to prevent revolution. Moreover, we find that inefficiencies and repression are necessary for the elite to maintain the control of political power. Under threat of revolution, the elite will democratize only if the level of natural resource rent is high enough to avoid revolution once democracy is implemented.

Date: 2011-12
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