Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/59727 
Year of Publication: 
2012
Series/Report no.: 
Nota di Lavoro No. 24.2012
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
Natural resources are generally associated to negative effects on the political environment of a country. This paper explores the impact that oil revenues have on the establishment of a given political system. Based on previous literature, a political economy perspective is employed. A simple game theoretical approach in order to explain the relationships between oil revenues, political instability (conflicts) and emergence of different political systems is presented. The implementation of particular redistributive fiscal policies together with the possibility that paternalistic or predatory autocracies emerge are considered. Under certain circumstances, a process of full democratization is argued not to represent an optimal choice for the oil-rich authoritarian nations. Since governments prefer to remain nondemocratic, in order to prevent internal conflicts from occurring, authoritarian countries have to undertake redistributive activities. Under other assumptions, governments of oil-rich nations prefer to introduce large military sectors. The present analysis determines how the emergence of redistributive of predatory policies depends on relevant parameters related to initial income, oil revenues and social inequality. Finally, we study the importance of socio-ethnical fragmentation in determining the political transition of oil producing nations.
Subjects: 
Natural Resources
Rentier States
Conflict and Endogenous Political Regimes
JEL: 
C72
D74
O13
P16
Document Type: 
Working Paper

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