POL SCI 50 Lecture Notes - Lecture 2: Resource Curse, Commerce Clause
Document Summary
Civil war involves intense violence that undoes economic growth. Foreign investors are scared away and there is a reduction in local investment (you can"t sell what you make or can"t make it). Commerce is disrupted because people are afraid to leave their homes and participate economically. The banking systems collapse due to no investment activity. Interstate commerce sometimes is disrupted if the warring country is between two countries that trade. The people who die in civil wars are the young (most likely to work if they lived). If people can"t count on the enforcement of contracts then economic and trade agreements can be broken and no one will want to participate. Corruption is the use of public resources for personal gain. Corruption can manifest itself in the form of electoral corruption (bribes/vote buying). Corruption undermines investment because it increases the risk of doing business.
