Oil, Gas and Conflict: A Mathematical Model for the Resource Curse.

ABSTRACT: Oil and natural gas are highly valuable natural resources, but many countries with large untapped reserves suffer from poor economic and social-welfare performance. This conundrum is known as the resource curse. The resource curse is a result of poor governance and wealth distribution structures that allow the elite to monopolize resources for self-gain. When rival social groups compete for natural resources, civil unrest soon follows. While conceptually easy to follow, there have been few formal attempts to study this phenomenon. Thus, we develop a mathematical model that captures the basic elements and dynamics of this dilemma. We show that when resources are monopolized by the elite, increased exportation leads to decreased domestic production. This is due to under-provision of the reso

SUBMITTER: Cai Y 

PROVIDER: S-EPMC3694977 | biostudies-literature | 2013

REPOSITORIES: biostudies-literature