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The Economics of ConflictTheory and Empirical Evidence$
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Karl Wärneryd

Print publication date: 2014

Print ISBN-13: 9780262026895

Published to MIT Press Scholarship Online: September 2014

DOI: 10.7551/mitpress/9780262026895.001.0001

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Natural Resources, Social Conflict, and Poverty Trap

Natural Resources, Social Conflict, and Poverty Trap

Chapter:
(p.41) 3 Natural Resources, Social Conflict, and Poverty Trap
Source:
The Economics of Conflict
Author(s):

Davide Fiaschi

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262026895.003.0004

Countries with output concentrated in primary sectors often exhibit low growth rates. This chapter identifies the cause of stagnation of these economies where a high level of social conflict due to the abundance of natural resources occurs in the presence of an initially low level of per capita GDP, a high social fractionalization, weak institutions, low investment rates, high population growth, high depletion of natural resources, and low life expectancy. It presents a theoretical model that provides a rationale for the high persistence of negative shocks in poor economies, as well as for the observed long-run impact of natural disasters. The model attempts to identify conditions under which countries can be trapped into a permanent underdevelopment regime.

Keywords:   economic stagnation, social conflict, negative shocks, primary sector, underdevelopment, economic development

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