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Secession with Natural Resources

Amrita Dhillon, Pramila Krishnan, Manasa Patnam and Carlo Perroni
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Amrita Dhillon: Kings College,London,and CAGE, University of Warwick
Pramila Krishnan: University of Oxford and CEPR
Manasa Patnam: CREST-ENSAE

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited are relatively larger proportion of natural resources. We argue that these patterns reflect how political reorganisation affected the quality of state governance of natural resources. We describe a model of collusion between state politicians and resource rent recipients that can account for the relationships we see in the data between natural resource abundance and post-break up local outcomes.

Keywords: Natural Resources and Economic Performance; Political Secession; Fiscal Federalism (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-dev, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1240

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