Why do armed groups sometimes coerce and sometimes not? Civilian suffering due to coercion in conflicts is larger; yet, anecdotal evidence suggests that armed groups often choose not to coerce. To explain the observed variation in coercive practices, I combine a two-sector specific-factos trade...

Natural resource abundance is a blessing for some countries, but a curse for othes. We show that differences across countries in the degree of fiscal decentralisation can contribute to this divergent outcome. First, the paper presents a unified theory that combines political and market...

This paper studies how monetary policy should optimally respond to an oil discovery.Oil discoveries provide news that the natural level of output will increase in the future. Anticipated increases in natural output lower the natural real interest rate. Optimal monetary policy must accommodate...

Resource-rich countries have tended to be autocratic and also have tended to use their resource wealth badly. The neoconservative agenda of promoting democratization in resource-rich countries thus offers the hopeful prospect of a better use of their economic opportunities. This paper examines...

This paper provides an analytic review of the upstream aspects of the exploitation of natural resources: the assignment of ownership rights, taxation, the discovery process, extraction, renewability, and clean-up. It sets these issues within the principal-agent framework. It proposes that the...

Where imports are financed predominantly by rents from resource extraction or aid, the revenue generated by tariffs is illusory. Reveue earned by the tariff is offset by a reduction in the real value of aid and resource rents. Revenue is however moved between accounts in the government budget...

We hypothesize that natural resources raise income inequality in ethnically polarized societies, but reduce income inequality in ethnically homogenous societies; and we present empirical evidence in support of this hypothesis.

What are the effects of regional integration and other trade policy measures in regions such as Central Asia or the Great Lakes Region of Africa where countries are remote with poor access to the outside world and where foreign exchange earnings come largely from natural resource based exports?...

There have been important studies of overall income inequality and of poverty in South Africa. In this paper, we approach the subject from a different direction: the extent and evolution of top incomes. We present estimates of the shares in total income of groups such as the top 1 per cent and...

This paper explores the choices faced by developing country governments that have received substantial revenues from natural resources. The economic principles underlying the choices between consumption, domestic investment, and the accumulation of foreign assets are analysed. The priority...