Noack, Frederik Riekhof, Marie-Catherine Quaas, Martin
Year of Publication:
Economics Working Paper Series 15/219
This paper explores the long–run development of an economy with a traditional sector based on common–pool resource-use, a modern, resource–independent sector with fixed entry costs, and an imperfect capital market. We show theoretically that introducing resource-use regulations increases incomes in the traditional sector and that this can trigger a development process with labor reallocation to the modern sector. Allowing trade of resource-use rights, or distributing resource-use rights unequally, broadens the scope for development.
natural resources and development use rights and development wealth distribution and occupational choice