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| Content Provider | Springer Nature Link |
|---|---|
| Author | Mahmud, Ahmed Saber Basher, Syed Abul |
| Copyright Year | 2014 |
| Abstract | This paper attempts to understand how price volatility affects the political transition of a resource-rich nation. Two states reflect price volatility: ‘high prices’ and ‘low prices’. We argue that whether or not political transition (i.e., a switch from one regime to another) will take place in a particular state depends critically on the kind of goods a country produces. If the main economic activity in a country is the extraction of “point-source” resources such as oil that demands capital-intensive production, the opportunity cost of switching the existing regime does not alter if the price of the resource changes but the benefit becomes more lucrative. Therefore, the incumbent group is most vulnerable during ‘high prices’. If the main economic activity of the nations is the production of “diffused resources” such as coffee that requires labor, prices do affect the opportunity cost. Nations concentrating in these commodities face acute political crisis during downturns. |
| Starting Page | 253 |
| Ending Page | 279 |
| Page Count | 27 |
| File Format | |
| ISSN | 14356104 |
| Journal | Economics of Governance |
| Volume Number | 15 |
| Issue Number | 3 |
| e-ISSN | 14358131 |
| Language | English |
| Publisher | Springer Berlin Heidelberg |
| Publisher Date | 2014-06-17 |
| Publisher Place | Berlin, Heidelberg |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Price volatility Natural resources Political systems Economics general Public Finance & Economics Political Science |
| Content Type | Text |
| Resource Type | Article |
| Subject | Business and International Management Economics, Econometrics and Finance |
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