Natural-resource rents and internal conflicts : can decentralization lift the curse? ; conference paper

Markwardt, Gunther; Farzanegan, Mohammad; Leßmann, Christian

We study how natural-resource rents affect the risk of internal conflict within countries and how the federal structure of countries influences this relationship. Natural-resource abundance may induce excessive rent-seeking and thus increase the risk of internal conflict. Fiscal and political decentralization as an institutional arrangement for rent-sharing and political codetermination of regions within a country may limit the destructive effect of the natural-resource rents on internal stability. Using cross-country and panel data covering the period 1984{2004 from more than 90 countries, we find evidence that natural-resource rents indeed increase the risk of internal conflict, but this relationship is significantly mitigated by decentralization.

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Year of publication:	2013 ; This version: February 2013
Authors:	Farzanegan, Mohammad Reza ; Lessmann, Christian ; Markwardt, Gunther
Published in:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung Session: Environment, regions, and innovation ; V1
Publisher:	[Kiel : ZBW
Subject:	Natural resources \| Risk of conflict \| Decentralization \| Dezentralisierung \| Natürliche Ressourcen \| Theorie \| Theory \| Politischer Konflikt \| Political conflict \| Welt \| World \| Rohstoffwirtschaft \| Resources sector \| Rohstoffvorkommen \| Resource deposit