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SISAF 444 Africa Studies Seminar

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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  1. Winter 2007 SISAF 444 Africa Studies Seminar Conflict: Natural Resources and Ethnicity

  2. Natural resources and competition for rents • Key factors in African conflicts: • Poverty • Dependence on natural resource exports • Low or negative economic growth

  3. 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)

  4. 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

  5. Wantchekon and Jensen 2004

  6. 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)

  7. Natural Resources in Africa: Diamonds

  8. Natural Resources in Africa: Oil National Geographic

  9. Natural Resources in Africa: Coltan Heinz School/Carnegie Mellon University

  10. Natural Resources in Africa: Coltan Approximately 60% of known world coltan reserves Heinz School/Carnegie Mellon University

  11. Sub-Saharan Africa, regional average

  12. NR-Rich Countries: Nigeria

  13. NR-Rich Countries: Equatorial Guinea

  14. NR-Rich Countries: Chad

  15. NR-Rich Countries: Angola

  16. NR-Rich Countries: Republic of Congo

  17. NR-Rich Countries: Sudan

  18. Challenges for natural-resource rich states • Scrutiny • Civil society: collective action problems • Transparency • Accountability

  19. Example:Chad-Cameroon pipeline

  20. Chad-Cameroon pipeline

  21. 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.

  22. Chad-Cameroon pipeline World Bank, Chad-Cameroon Pipeline Website

  23. Chad-Cameroon pipeline BBC, 13 April 2006

  24. 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”

  25. Posner 2004 Lake Malawi Zambia Malawi

  26. Posner 2004 • Cultural cleavages • How important is “ethnic identity” ? • Political salience • Mobilization

  27. “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

  28. A Simple Model of Governance

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