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Working Paper 351 - Between a Rock and a Hard Place: A New Perspective on the Resource Curse

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Abstract

Military expenditure shares significantly affect the relationship between the risk of civil conflict outbreak and natural resources. We show that a significant positive correlation between the risk of civil conflict outbreak and resource rents is limited to countries with low military expenditure shares. In countries with high military expenditure shares there is no significant relationship between the risk of civil conflict outbreak and rents from natural resources. An important message is thus that a conflict resource curse is absent in countries with sufficiently large military expenditure shares. However, there is a trade-off: the larger military expenditure shares, the smaller is the effect that resource rents have on economic growth and democracy.

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  • Rabah Arezki & Markus Brueckner, 2021. "Working Paper 351 - Between a Rock and a Hard Place: A New Perspective on the Resource Curse," Working Paper Series 2477, African Development Bank.
    • Handle: RePEc:adb:adbwps:2477
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    More about this item

    Keywords

    Military expenditure; Resource rents; Civil conflict; Democracy JEL classification: D74; Q02; Q34;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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