Resource curse or rentier peace? The impact of natural resource rents on military expenditure

2021 ◽  
Vol 71 ◽  
pp. 101989
Author(s):  
Trung K. Do
2020 ◽  
pp. 097215092096136
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Ali Aboutorabi ◽  
Farzaneh Ahmadian Yazdi

This article explores the impact of financial development on the ‘natural resources rents–foreign capital accumulation nexus’ in selected natural resource–rich countries during 1970Q1–2016Q4. In doing so, we propose a new approach by applying the autoregressive distributed lag (ARDL) rolling regression technique for our empirical purpose. The results show that financial development has a positive and significant effect on the way natural resource rents affect foreign capital in the case of Australia, Chile, Ecuador, Egypt and Peru in both the short run and the long run. We achieve the same results in the case of Colombia and Iran too, but just in the long run. Also, short-term and long-term negative effects of financial development on the rents–foreign capital nexus are witnessed just in the case of Algeria. We provide some empirical evidence for further robustness of our findings. Finally, we suggest that there is a necessity for the development of the financial system in natural resource–rich countries to reach higher levels of foreign capital, which has a crucial role in their economic growth.


2021 ◽  
pp. 1-21
Author(s):  
UMAIMA ARIF ◽  
MUHAMMAD USMAN ◽  
FARZANA NAHEED KHAN

The study explores the impact of natural resource rents on internal conflicts and examines how the aforementioned relationship is influenced by institutional quality. The study is based on a panel dataset of 70 countries for the period 1991–2018. The empirical evidence shows that natural resource rent leads to an increase in internal conflict in both developed and developing countries. However, the impact of natural resource rent on internal conflict is negative in the presence of better quality of government institutions for the global sample, developed and developing countries. Hence, natural resource rent leads to a reduction in internal conflict when it is supported by better institutional quality in terms of high bureaucratic quality, rule of law and low corruption in government institutions. Overall, the study finds that natural resource rent leads to an increase in internal conflict, however, this relationship is mitigated by better institutional quality.


2021 ◽  
Vol 14 (12) ◽  
pp. 575
Author(s):  
Rabah Arezki ◽  
Markus Brueckner

Military expenditures significantly affect the relationship between the risk of civil conflict outbreak and natural resources. We show that a significant positive effect of natural resource rents on the risk of civil conflict outbreak is limited to countries with low military expenditures. In countries with high military expenditures, there is no significant effect of natural resource rents on civil conflict onset. An important message is thus that a conflict resource curse is absent in countries with sufficiently large military expenditures.


Author(s):  
Anna Hvid

AbstractThe literature on the resource curse suggests that countries with large natural resource rents and weak institutions may experience rent seeking conflicts among different groups, potentially resulting in high inequality and welfare losses. While agricultural land has so far been categorized as a diffuse resource with low economic value, this categorization may no longer be appropriate, because demand for land is currently on the rise, and may continue to increase in the future. This study presents and discusses recent theoretical and empirical approaches to analyzing the effects of high-value agricultural land on rent seeking and rent distribution. Results suggest that the potential for small scale farmers to organize and obtain political power determines the extent of rent seeking and rent distribution, and that while more democratic institutions may increase the share of rents going to the farmers, they may have adverse welfare effects, because they may increase the competition for rents among groups, and hence the amount of resources spent on rent seeking.


2011 ◽  
Vol 44 (6) ◽  
pp. 719-746 ◽  
Author(s):  
Kevin M. Morrison

What determines how authoritarian regimes use internationally attained revenues such as natural resource rents to stay in power? The answer, this article argues, lies partly in the nature of the socioeconomic cleavages in the country. The article presents a comparison of Kenya and Mexico, two countries that experienced similar rises and falls in internationally derived nontax revenue in the context of similar political regimes. The countries differed, however, in their socioeconomic cleavages: In Mexico, cleavages were along sectoral or class lines, whereas in Kenya they were along ethnic lines. The author demonstrates how these differences led governments in the countries to use nontax revenues in different ways, with important consequences in particular for social spending. Despite the recent turn in the resource curse literature emphasizing domestic contextual factors, socioeconomic cleavages have been relatively ignored. The findings here begin to fill that gap, with important implications for several literatures.


2021 ◽  
Author(s):  
Juan Francisco Meneses ◽  
José Luis Saboin

This paper analyzes the behavior of a long list of economic variables during episodes of recovery from an economic collapse. A set of stylized facts is proposed so as to depict what in this work is called \saygrowth recoveries. Through different estimation techniques, it is inferred under which conditions and policies the likelihood of experiencing a growth recovery increases. The results of the paper indicate that collapses tend to occur in countries with high dependence on natural resource rents, macroeconomic mismanagement, low levels of democratic accountability and rule of law and high levels of conflict. Recoveries, on the other hand, tend to be longer than collapses and are more likely to occur in contexts of: improved external conditions, less natural resource rents, balanced fiscal accounts, where the exchange rate corrects but within a more fixed exchange rate regime and a more restricted financial account, and where there are: rebounds in private consumption, increases in international trade and improvements on property rights.


2020 ◽  
Vol 162 ◽  
pp. 50-66 ◽  
Author(s):  
Kazeem B. Ajide ◽  
Juliet I. Adenuga ◽  
Ibrahim D. Raheem

2020 ◽  
Vol 12 (3) ◽  
pp. 335-358
Author(s):  
Fisayo Fagbemi ◽  
Grace Omowumi Adeoye

Nigeria is a glaring example of a country where weak public institutions are pervasive in spite of its huge natural resource wealth. The presence of natural resource abundance has exacerbated the overwhelming development challenge in the economy. While the upshot of most empirical findings of the resource impact covers how the growth path is determined through the channel of institutions, the question as to why resource rents often fail to stimulate improved governance is more critical than ever. Hence, the study examines the effect of natural resource rents on the quality of governance in Nigeria for the period 1984–2017, using ARDL bounds test approach, Dynamic Least Squares (DOLS), and Granger Causality test based on Vector Error Correction Model (VECM). Results reveal that natural resource rents have an insignificant effect on governance indicators in the long-run as well in the short-run, suggesting that natural resource windfalls have a shallow effect on the development of good governance. However, further evidence indicates that pervasive institutional gaps in Nigeria could be stimulated or caused by the overdependence on natural resource rents and entrenched mismanagement tendencies. Thus, the study suggests that maintaining strong political commitment, curtailing overdependence on natural resources, and ensuring sound management of natural resource wealth are central for improved governance.


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