Caselli,F.(2006): Power struggles and the natural resource curse. LSE Research Online, Working Paper, 20p.


 Empirical evidence suggests that the natural-resource curse operates through the behavior of the political elite, yet there are few models that convincingly illustrate the mechanism at work. I present a model where natural-resource abundance generates power struggles, thereby increasing the effective discount rate of the governing group. As a result, the elite makes fewer investments in the long-run development of the country.』

1. Introduction
2. Natural resources and development policy
 2.1. Model
 2.2. Analysis
3. Extensions
 3.1. Commitment
 3.2. Debt
 3.3. Case τρy<1
 3.4. Endogenous γ
4. Discussion
Appendix 1
: Equilibrium with commitment
5. Appendix 2
: Case τρy<1