The Geography of Natural Resources, Ethnic Inequality and Development
Publisher: CESfio Working Paper Series
Author(s): Christian Lessmann and Arne Steinkraus
Date: 2017
Topics: Conflict Causes, Extractive Resources, Governance, Livelihoods, Renewable Resources
This paper studies whether the spatial distribution of natural resources across different ethnic groups within countries impede spatial inequality, national economic performance, and the incidence of armed conflict. By providing a theoretical rent-seeking model and analysing a set of geocoded data for mines, night-time light emissions, local populations and ethnic homelands, the authors show that the distribution of resources is a major driving factor of ethnic income inequality and, thus, induces rent-seeking behaviour. Consequently, the authors extend the perspective of the resource curse to explain cross-country differences in economic performance and the onset of civil conflicts. The authors show that the inequality in the spatial distribution of resource endowments within countries drives the curse of natural resources, not the resources per se.