Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71167
Authors: 
Farzanegan, Mohammad Reza
Lessmann, Christian
Markwardt, Gunther
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Public Choice 4180
Abstract: 
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.
Subjects: 
natural resources
risk of conflict
decentralization
JEL: 
H77
P48
Q34
Q38
Document Type: 
Working Paper

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