Narrow Results

Mineral wealth tends to make countries less democratic and more likely to experience a civil war. Many countries also find it hard to use their natural resource revenues to make high-quality, growth-enhancing investments. I argue that these problems are caused, in part, by the unusual qualities of resource revenues — their great size, their non-tax source, their lack of stability, and their secrecy. While there is no universal formula for changing these four qualities, I present a menu of policies that could make natural resource revenues smaller, smoother and more transparent, and hence easier for governments to invest productively.

This paper expands the micro-foundations of the traditional greed and grievance non-cooperative model of civil conflict. First, we allow for greed and grievance to be orthogonal, so that they may affect each other rather than being exogenous. Second, we allow for the reaction curves of both parties in non-cooperative games to be substitutes and not inevitably complementary, so a peaceful strategy from a group may be followed by a belligerent upsurge from the other. Third, we also allow for Diaspora transfers to rebel groups, thus generating a trade-off between the gains associated with peace and war among rebels. Fourth, we expand external aid in the form of fungible financing of government transfers 'buying' peace by allowing for mechanisms that induce behavioural change towards peace. These extensions provide a better understanding of conflict persistence, the consequences of competing international aid and sub-optimal sanctions provision ("cheap talk") by the international community.

Since its start in 2011, civil war in Syria dramatically affected the economic life of the country and the entire region. Due to the ongoing conflict, the environment for business conduct has worsened in Syria, and business activities have considerably shrunk. Nevertheless, with its diverse self-sufficient economy, numerous natural resources and abundant human capital, Syria appears to be prepared for economic shocks better than any other Middle Eastern states (Lyme, 2012). Although prospects for democratisation in post-war Syria remain dim, the country would face the urgent need to reinvent itself both economically and politically.

Since the Second World War, Africa and especially Sub-Saharan Africa (SSA) has had the poorest economic performance of any region in the world. Ironically, many African countries had set out with high hopes once they had thrown off the yoke of colonial rule but it was not long before disaster struck. Against the background of an expanding world economy Africa experienced ‘a chronic failure of economic growth’ (Collier and Gunning, 1996), so that by the end of the 20th century incomes per capita were little better than they had been at the time of independence, and in some cases a good deal worse. The main problem was the failure to improve the efficiency of resource use; in contrast to the position in many other developing countries total factor productivity was either static or negative for much of the time (Ndulu and O'Connell, 1999; Crafts, 2000). Thus while poverty was declining elsewhere, it was increasing steadily in SSA. By the turn of the century two-thirds of the population were estimated to be living at subsistence or below the absolute poverty line, while nearly one-half the world's poor lived in Africa (United Nations, 1997).

There are of course many factors which can explain this remarkable state of affairs, but the one we shall focus on this chapter is Africa's great weakness in statecraft, by which we refer to political systems, bureaucracies, administrative organizations, property and legal rights and general issues of trust and contract enforcement. In other words, it is a question of good governance as opposed to bad governance and corruption. The general argument here is that with few exceptions African countries have lacked a sound social and political base which would favor growth and development and that this base has tended to deteriorate over time.