A theory of civil conflict and democracy in rentier states

Abstract

The effects of resource rents on the political equilibrium have been studied in two main types of models. The first tradition employs models of conflict, and studies how resource rents affect the intensity and duration of civil conflict. The second tradition employs political economy models, where resource rents affect the political equilibrium because the costs and benefits of buying votes change. Although providing much insight, a primary disadvantage of these two model traditions is that they have little to say about when democracy emerges, and about when conflict emerges. This question is simply determined by the type of model one chooses to study. Yet an important empirical literature suggests that a main effect of resource rents may be exactly that it affects the political choice between democracy and civil conflict. In this paper, by integrating the earlier model traditions, we suggest the simplest possible framework we can think of to study this choice. The institutional outcome in our theory is consequently endogenous. We show how factors such as resource rents, the extent of electoral competition, and productivity affect economic and political equilibria, and discuss how our approach, mechanisms and results differ from the earlier theories.