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Natural Resources, Social Conflict and Poverty Trap

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  • Davide Fiaschi

Abstract

The paper analyses a model where the fight for the appropriation of rents from natural resources between two groups leads to multiple equilibria. The possibility to be trapped into the low-income equilibrium, characterized by strong social conflict (civil war) and stagnation of income, increases with the weakness of political institutions, the population growth rate, the amount of rents from natural resources and the rate of depletion of natural resources and decreases with the level of per capita income, the investment rate and the length of life expectancy of individuals. The size of minority has an ambiguous effect, widening the range of income leading to low-income equilibrium, but also raising incentives to reach an agreement, i.e. a social contract, without any social conflict. Empirical evidence appears to support these findings.

Suggested Citation

  • Davide Fiaschi, 2009. "Natural Resources, Social Conflict and Poverty Trap," Discussion Papers 2009/82, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2009/82
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2009-82.pdf
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    References listed on IDEAS

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    Cited by:

    1. Luciano Fanti & Luca Gori, 2012. "Endogenous Lifetime in an Overlapping-Generations Small Open Economy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 68(2), pages 121-152, June.
    2. Manuela Gussoni & Andrea Mangani, 2012. "The Impact of Public Funding for Innovation on Firms' R&D Investments: Do R&D Cooperation and Appropriability Matter?," L'industria, Società editrice il Mulino, issue 2, pages 237-254.
    3. Luciano Fanti & Luca Gori, 2009. "Endogenous fertility, endogenous lifetime and economic growth: the role of health and child policies," Discussion Papers 2009/91, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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    More about this item

    Keywords

    natural resources; social conflict; poverty trap; institutions; civil war;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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