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Rent seeking and regime stability in rentier states

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  • Bjorvatn, Kjetil
  • Naghavi, Alireza
Abstract
Are natural resources a source of conflict or stability? Empirical studies demonstrate that rents from natural resources, and in particular oil, are an important source of civil war. Allegedly, resource rents attract rent-seekers, which destabilize society. However, there is a large literature on how so-called rentier states manage to pacify opposition groups by handing out special favors. The present paper attempts to bridge the gap between the rent-seeking view of resource rents as a source of conflict and the rentier state view which emphasizes the role of resource rents in promoting peace and stability. The mechanism that we highlight relies on the notion that higher rents may activate more interest groups in a power struggle. We demonstrate that the associated increased cost of conflict may in fact promote regime stability. The peaceful solution is upheld by a self reinforcing transfer program, in the form of patronage employment. The chance of conflict and rent dissipation in our model is highest for intermediate levels of resource rents, where the government cannot make credible commitments to the opposition groups.

Suggested Citation

  • Bjorvatn, Kjetil & Naghavi, Alireza, 2011. "Rent seeking and regime stability in rentier states," European Journal of Political Economy, Elsevier, vol. 27(4), pages 740-748.
    • Handle: RePEc:eee:poleco:v:27:y:2011:i:4:p:740-748
    DOI: 10.1016/j.ejpoleco.2011.05.007
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    Cited by:

    1. Ongo Nkoa, Bruno Emmanuel & Song, Jacques Simon & Minkoue Bikoula, Brice, 2024. "Natural resource rents in developing countries: Is the positive influence on the fragilities real?," Resources Policy, Elsevier, vol. 89(C).
    2. Mohtadi, Soran & Castells-Quintana, David, 2021. "The distributional dimension of the resource curse: Commodity price shocks and income inequality," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 63-78.
    3. Seghezza, Elena & Pittaluga, Giovanni B., 2018. "Resource rents and populism in resource-dependent economies," European Journal of Political Economy, Elsevier, vol. 54(C), pages 83-88.
    4. Masi, Tania & Savoia, Antonio & Sen, Kunal, 2024. "Is there a fiscal resource curse? Resource rents, fiscal capacity and political institutions in developing economies," World Development, Elsevier, vol. 177(C).
    5. repec:elg:eechap:15325_3 is not listed on IDEAS
    6. Berisha, Edmond & Chisadza, Carolyn & Clance, Matthew & Gupta, Rangan, 2021. "Income inequality and oil resources: Panel evidence from the United States," Energy Policy, Elsevier, vol. 159(C).
    7. De Luca, Giacomo & Sekeris, Petros G. & Vargas, Juan F., 2018. "Beyond divide and rule: Weak dictators, natural resources and civil conflict," European Journal of Political Economy, Elsevier, vol. 53(C), pages 205-221.
    8. Tridimas, George, 2012. "How democracy was achieved," European Journal of Political Economy, Elsevier, vol. 28(4), pages 651-658.
    9. Khezri, Mohsen & Heshmati, Almas & Ghazal, Reza & Khodaei, Mehdi, 2022. "Non-resource revenues and the resource curse in different institutional structures: The DIGNAR-MTFF model," Resources Policy, Elsevier, vol. 79(C).
    10. Tania Masi & Antonio Savoia & Kunal Sen, 2020. "Is there a fiscal resource curse? Resource rents, fiscal capacity, and political institutions in developing economies," WIDER Working Paper Series wp2020-10, World Institute for Development Economic Research (UNU-WIDER).
    11. Chen, Hong & Feng, Qun & Cao, Jing, 2014. "Rent-seeking mechanism for safety supervision in the Chinese coal industry based on a tripartite game model," Energy Policy, Elsevier, vol. 72(C), pages 140-145.
    12. Parcero, Osiris J. & Papyrakis, Elissaios, 2016. "Income inequality and the oil resource curse," Resource and Energy Economics, Elsevier, vol. 45(C), pages 159-177.
    13. Colin O'Reilly & Ryan H. Murphy, 2017. "Do Institutions Mitigate The Risk Of Natural Resource Conflicts?," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 532-541, July.
    14. Cappelli, Federica & Carnazza, Giovanni & Vellucci, Pierluigi, 2023. "Crude oil, international trade and political stability: Do network relations matter?," Energy Policy, Elsevier, vol. 176(C).
    15. Rustam Jamilov, 2013. "Optimal Resource Rent," William Davidson Institute Working Papers Series wp1046, William Davidson Institute at the University of Michigan.
    16. Van Long, Ngo, 2013. "The theory of contests: A unified model and review of the literature," European Journal of Political Economy, Elsevier, vol. 32(C), pages 161-181.
    17. Zallé, Oumarou, 2023. "Natural resource rents and regime durability: Identifying cross-country durability regimes," Resources Policy, Elsevier, vol. 81(C).
    18. Osiris Jorge Parcero & Elissaios Papyrakis, 2024. "Income inequality and the oil resource curse," Papers 2401.04046, arXiv.org.
    19. Johan Lilliestam & Anthony Patt, 2015. "Barriers, Risks and Policies for Renewables in the Gulf States," Energies, MDPI, vol. 8(8), pages 1-23, August.

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    More about this item

    Keywords

    Rent seeking; Rentier states; Resource rents; Stability; Conflict; Patronage employment;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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