Social and Behavioral Sciences Commons^™

Natural Resources And Internal Conflicts - How Decentralization Lifts The Curse, Mohammad Reza Farzanegan, Gunther Markwardt, Christian Lessmann

Prof. Dr. Mohammad Reza Farzanegan

We study how the natural resource endowments affect risk of internal conflicts and how this effect depends on decentralization levels in a political system. Resource rents, especially lootable resources such as oil, finance conflicts, creating strong separatist movements. Our main hypothesis is that increasing the levels of political decentralization can limit the destructive effect of the natural resource rents on internal conflicts. We use cross-country and panel data covering the period from 1984–2004 from more than 80 countries to test this hypothesis. Our estimates confirm that the relationship between the natural resource rents and risk of internal conflict is dependent …