Title

A New Resource Curse: How Externalities and Governance Shape Social Conflict

Author(s)

Renard Sexton Renard Sexton (Princeton University)

Abstract

Natural resource extraction is increasingly important in many developing countries, but harmful externalities threaten the viability of the sector. This paper articulates and finds evidence for a new ‘resource curse,’ whereby negative side effects from resource extraction increase social conflict in nearby communities. Using micro-level data on extractive commodities, water pollution, children’s and livestock health, local government quality and mining-related social conflict in Peru, this study shows that rising international prices increase conflict, pollution and negative health effects, but not public spending in mining areas. These effects disappear when local government is high quality, indicating that good governance can temper the effects of this new resource curse.

Creation Date

2018-04

Section URL ID

Paper Number

9

URL

https://esoc.princeton.edu/publications/esoc-working-paper-9-new-resource-curse-how-externalities-and-governance-shape-social

File Function

Jel

D74, Q34, O13, L72

Keyword(s)

Peru, Conflict, Natural resources, Externalities, Governance

Suppress

false

Series

12