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Winter 2007. SISAF 444 Africa Studies Seminar. Conflict: Natural Resources and Ethnicity. Natural resources and competition for rents. Key factors in African conflicts : Poverty Dependence on natural resource exports Low or negative economic growth.

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SISAF 444 Africa Studies Seminar

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Winter 2007

SISAF 444 Africa Studies Seminar

Conflict:

Natural Resources and Ethnicity


Natural resources and competition for rents

  • Key factors in African conflicts:

    • Poverty

    • Dependence on natural resource exports

    • Low or negative economic growth


Natural resources and competition for rents

  • Rents:

    • “profits that are much higher than the minimum level needed to keep the activity going”

    • “easy profits”

    • Often related to scarce resources that are unique cannot be replicated (e.g. mineral resources, talent)


Six routes from natural resources rents to conflict

  • Political struggle for control of rents (rent-seeking)

  • Government less dependent on people (revenue imperative)

  • Risk of secession in mineral-rich areas

  • Rents are source of rebel finance

  • Appreciation of real exchange rate (“Dutch disease”)

  • Resource prices are often volatile


Wantchekon and Jensen 2004


Wantchekon and Jensen 2004

  • Countries that are NR-dependent have lower democracy scores

  • NRs make democratic transition or consolidation (political liberalization) more difficult

  • NR-rich countries have greater government consumption

  • NR-rich countries have worse governments (World Bank governance measures)


Natural Resources in Africa: Diamonds


Natural Resources in Africa: Oil

National Geographic


Natural Resources in Africa: Coltan

Heinz School/Carnegie Mellon University


Natural Resources in Africa: Coltan

Approximately 60% of known world coltan reserves

Heinz School/Carnegie Mellon University


Sub-Saharan Africa, regional average


NR-Rich Countries: Nigeria


NR-Rich Countries: Equatorial Guinea


NR-Rich Countries: Chad


NR-Rich Countries: Angola


NR-Rich Countries: Republic of Congo


NR-Rich Countries: Sudan


Challenges for natural-resource rich states

  • Scrutiny

    • Civil society: collective action problems

    • Transparency

    • Accountability


Example:Chad-Cameroon pipeline


Chad-Cameroon pipeline


Chad-Cameroon pipeline

  • Revenues due to Chad are deposited in an escrow account in London

  • 10% of revenues placed in a “Future Generations Fund”

  • Allocation of oil revenues monitored by oversight committee (CCRSP) that includes representatives from civil society, government, parliament and supreme court.


Chad-Cameroon pipeline

World Bank, Chad-Cameroon Pipeline Website


Chad-Cameroon pipeline

BBC, 13 April 2006


Costs and Benefits of “Ethnicity”

  • Bates on positive and negative aspects of kinship/ethnicity-based economies

  • Ethnicity and networks, enforcement based on relationships and “identity”

  • Volatility

  • Economic growth and “meritocracy”


Posner 2004

Lake Malawi

Zambia

Malawi


Posner 2004

  • Cultural cleavages

    • How important is “ethnic identity” ?

  • Political salience

    • Mobilization


“Gangs of New York”

William “Boss” Tweed

Tammany Hall

  • New York City, 1840s to 1860s

  • Irish immigrants vs. “nativists”

  • Democratic Party “machine politics” and patronage

  • New York Draft Riots


A Simple Model of Governance


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