@article{e0aa9b7cce8649eea160aab0e273bf2c,
title = "On the looting of nations",
abstract = "We develop a dynamic discrete choice model of an unchecked ruler making decisions regarding the development of a resource rich country. Resources serve as collateral and facilitate the acquisition of loans. The ruler chooses either to stay in power while facing the risk of being ousted, or loot the country's riches by liquefying the resources through lending. We show that unstructured lending from international credit markets can create incentives to loot the country; and an enhanced likelihood of looting causes greater political instability, and diminishes growth. Using a treatment effects model, we find evidence that supports our predictions.",
author = "Mare Sarr and Erwin Bulte and Chris Meissner and Tim Swanson",
note = "Funding Information: Acknowledgements We would like to thank Chen Le-Yu, Toke Aidt, Imran Rasul, Simon Lee, Lars Nesheim, Nicola Pavoni, Ragnar Torvik, John Hartwick, Chris Knittel and seminar participants at the University of Birmingham, University College London, University of Oxford, University of Cape Town, University of Warwick, Cornell University, Venice University, UCLA, Stanford GSB, and the Indian Statistical Institute Delhi for their valuable comments. We also thank Kirk Hamilton and Giovanni Ruta for sharing their data on natural resources with us. We extend our appreciation to Public Choice Editor in Chief William Shughart and the reviewers for their helpful comments. Finally, Mare Sarr gratefully acknowledges financial support from Economic Research Southern Africa (ERSA) and Erwin Bulte would like to thank the Dutch Organization for Scientific Research (N.W.O.) for financial support (grant nr. 452-04-333). The usual disclaimer applies.",
year = "2011",
month = sep,
doi = "10.1007/s11127-010-9659-9",
language = "English (US)",
volume = "148",
pages = "353--380",
journal = "Public Choice",
issn = "0048-5829",
publisher = "Springer Netherlands",
number = "3-4",
}
