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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18974| Title: | Globalization and domestic conflict |
| Keywords: | D78 D74 D72 K42 F10 F02 ddc:330 globalization trade openness property rights enforcement insecurity conflict Außenhandelsliberalisierung Rohstoff Außenhandel Rohstoffressourcen Eigentumsrecht Politische Unruhen Bürgerkrieg Außenhandelseffekt Wohlfahrtseffekt Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | We examine how globalization affects trade patterns and welfare when conflict prevails domestically. We do so in a simple model of trade, in which a natural resource like oil is contested by competing groups using real resources (?guns?). Thus, conflict is viewed as ultimately stemming from imperfect property-rights enforcement. When comparing autarky with free trade in such a setting, the gains from trade have to be weighed against the possibly higher resource costs of conflict. We find that importers of the contested resource gain unambiguously. By contrast, countries exporting the contested resource will lose under free trade, unless the international price of the resource is sufficiently high. Regardless of what price obtains in international markets, countries tend to over-export the contested resource relative to what we would observe if there were no conflict; for some range of prices, the presence of conflict even inverts the country's comparative advantage. We find further that an increase in the international price of the contested resource over an even wider range reduces welfare, an instance of the ?natural resource curse.? |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18974 |
| Other Identifiers: | http://hdl.handle.net/10419/18974 ppn:50053649X |
| Appears in Collections: | EconStor |
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