Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96865
Authors: 
Bjorvatn, Kjetil
Farzanegan, Mohammad Reza
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4727
Abstract: 
We study the association between resource rents and political stability, highlighting the importance of the distribution of political power as a mediating factor. We present a simple theoretical model showing that increased rents are likely to be positively associated with the stability of a powerful incumbent while destabilizing a less powerful incumbent. Our empirical analysis confirms this prediction: Using panel data for more than 120 countries from 1984-2009, our results show that rents can promote political stability, but only when the political power is sufficiently concentrated. Indeed, if the incumbent is sufficiently weak, rents fuel instability. Our main results hold when we control for time varying common shocks, country fixed effects and various additional covariates.
Subjects: 
resource rent
political power
political stability
conflict
JEL: 
A10
C50
E60
O11
O20
Q30
Q48
Document Type: 
Working Paper

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