Natural resource rents and regime durability: Identifying cross-country durability regimes

Abstract

Natural resource abundance is sometimes seen as both a blessing and a curse by the possessing countries. However, the conclusions that are drawn for either of these scenarios are questionable, as they are based on an ad hoc selection of countries. This paper analyzes the effects of natural resource abundance on political regime durability based on an endogenous classification of countries. A finite mixture model is applied to a large sample of 129 countries over the 1980–2020 period. The results show that patterns of political regime durability can be segmented into three regime types. The first type is characterized by the absence of a link between natural resources and regime durability. The second type reflects the fact that natural resource rents reinforce political regime durability. The third type is marked by a reduction in political regime durability by natural resource abundance. The results also show that countries at low risk for internal and external conflicts and ethnic tensions are more likely to belong to the second regime type. Finally, countries with a high risk of corruption and poor socioeconomic conditions are less likely to belong to the third regime type. These results underscore the need for resource-rich countries to improve institutional quality by reducing the risks associated with conflict, tension, and corruption.