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more obstructable or lootable). Finally, there are issues with sample size and averaging,
rendering the econometric findings of Collier and Hoeffler non-robust to variations in
coverage.
The availability of lootable and obstructable resource rents may be a better expla-
nation for the longer duration of civil war rather than its actual onset. Natural resource
rents can, in and of themselves, also become a source of grievance leading to war and
insurgency if local populations feel that they are not getting their fair share of the
proceeds of resource rents. Such is the case in the Niger Delta region of Nigeria. It can
also cause secessionist tendencies among relatively rich regions that no longer want to
share their wealth with their fellow countrymen, as in the case of Aceh in Indonesia.
The greed motivation for conflict discussed thus far is by no means the only expla-
nation. Aptly titled, the resource curse provides another explanation for conflict. The
resource curse argues that the presence of substantial natural resource rents retards
development through political economy channels. This has a bearing on resource rents
as a potential driver of civil war, as civil war is one (violent) form of competition over
the right to control resource rents. In a nutshell, the negative effects of resource rents
from a political economy perspective arise when it leads to rent seeking and corruption,
both of which have a destructive effect on normal productive investment and hence
growth. The key mechanism in the middle which transforms resource wealth and rents
to a problematic political economy is institutional quality. Kleptocratic motivations
may also lead to the deliberate undermining of the institutions that sustain the social
contract mentioned above. The important point is that institutional quality is partially
historically determined, but they are equally determined by (or endogenous to) natural
resource abundance or dependence.
A related question is what do we precisely mean by institutions. In the literature
under review here, institutions pertain to the measured quality of governance, and
sometimes to the nature of the political system (democracy, autocracy, anocracy, presi-
dential/primeministerial systems, constraints on the executive). All of these phenomena
are numerically measured in various data sets that code and rank institutional quality.
Mavrotas, Murshed and Torres (2011) demonstrate that both point-source (mainly
mineral and fuels) and a diffuse (agricultural) type natural resource dependence retard
the development of democracy and good governance, which in turn hampers economic
growth. In this connection good governance may be more salient for economic growth
relative to the quality of democracy.
Auty and Gelb (2001) argue cogently that an abundance of natural resource wealth
can make the state and society less benevolent and more extractive compared to devel-
opmental states that nurture an internationally competitive manufacturing sector, as in
North-East Asia. An abundance of resource rents, especially oil and gas rents, can also
retard state capacity, especially fiscal capacity. This is because the state is less reliant
on taxes as a source of revenue, depending to some extent on royalties associated with
oil and gas. This may have a negative impact on democratic development (Ross 2001),
as lower levels of taxation imply less accountable government.
Is it natural resource abundance or dependence which is at issue here? A country
may be abundant in natural resources, but may not depend as much on these if it
has a diversified economy, compared to undiversified resource dependent economies
(referred to as the staple trap by Auty and Gelb, 2001). For example, the United
States is abundant in many types of natural resources, but is less dependent on them
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