Christa N. Brunnschweiler’s research while affiliated with University of East Anglia and other places

We present a new dataset that tracks changes in legal ownership regimes in the petroleum sector between 1867 and 2008 for a panel of countries. We document that foreign ownership has been taken over by partnerships as the leading ownership regime, while domestic ownership is on the rise again in recent years. We use this dataset to examine whether institutional change in the petroleum sector leads to more oil and gas exploration and discoveries. On average, switching to majority foreign ownership is related to up to a quarter of a standard deviation more discoveries than under majority domestic ownership. Switching to partnership is positively related to drilling activity, but is less likely to be linked to many more discoveries. Petroleum exploration and discoveries may thus be endogenous to industry-specific institutional change.

Demographic forces are crucial drivers of macroeconomic performance. Yet, existing theories do not allow demography to respond to fundamentals and policies while determining key macroeconomic variables. We build a model of endogenous interactions between fertility and innovation-led productivity growth that delivers empirically consistent co-movements of population, income and wealth. Wealth dilution and wage dynamics stabilize population through non-Malthusian forces; demography determines the ratios of labor income and consumption to financial wealth. Shocks that reduce population size, like immigration barriers, reduce permanently the labor share and the mass of firms, creating prolonged stagnation and substantial intergenerational redistribution of income and welfare.

We propose that relative economic backwardness contributes to the build‐up of social tension and nonviolent and violent conflict. We test our hypothesis using data on organized mass movements and armed civil conflict. The findings show that greater economic backwardness is consistently linked to a higher probability of seeing the onset of violent and especially nonviolent forms of civil unrest. We provide evidence that the relationship is causal in IV estimations using new instruments, including mailing speeds and telegram charges around 1900. The magnitude of the effect of backwardness on social tension increases in the 2SLS estimations. This article is protected by copyright. All rights reserved.

The large empirical conflict literature has established that there is a strong negative link between economic variables and the onset of an armed civil conflict. However, it has been difficult to demonstrate a clear causality between poor economic performance and increased risk of conflict because of potential endogeneity issues, especially for large country samples. Most existing studies that analyse the causal links focus on the effects of economic growth on conflict, even though conventional conflict studies find the strongest relationship for income levels. In this article, we use three new exogenous instruments for income per capita, based on historical data for mailing times, telegram charges and urbanization rates. Using instrumental variables methods and global panel data for the period 1946–2014, we show that the negative effect of income per capita on the probability of conflict onset is consistently strong and larger than in conventional estimations using pooled ordinary least square regressions.

The conventional explanation for strikes is that they are caused by an asymmetry of information about the profitability of the firm – union members are uninformed whereas management are informed. Instead, this paper builds a model of strikes where a perception of unfairness provides an expressive benefit to vote for a strike. The asymmetry of information is now reversed such that management are uninformed about the emotionality of union members. The model predicts that larger union size increases both wage offers and the incidence of strikes. An empirical test using UK data provides support for the predictions. In particular, union size is positively correlated with the incidence of strikes and other industrial actions, even when asymmetric information regarding profitability is controlled for.

In this paper we challenge the conventional view that strikes are caused by asymmetric information regarding firm profitability such that union members are uninformed. Instead, we build an expressive model of strikes where the perception of unfairness provides the expressive benefit of voting for a strike. The model predicts that larger union size increases both wage offers and the incidence of strikes. Furthermore, while asymmetric information is still important in causing strikes, we find that it is the employer who is not fully informed about the level of emotionality within the union, thereby contributing to strike incidence. An empirical test using UK data provides support for the predictions. In particular, union size has a positive effect on the incidence of strikes and other industrial actions even when asymmetric information regarding profitability is controlled for.

We analyze the effects of different regimes of control rights over critical resources on the total domestic income of open economies. We consider home control, foreign control, and international partnerships in a theoretical model where contracts are incomplete, resource exploitation requires local capital, and foreign technologies are more efficient. Enacting foreign control is never optimal, and assigning complete residual rights to foreign firms reduces domestic income. Two testable predictions are derived. First, international partnerships tend to generate higher domestic income than foreign control. Second, the typical regime choice is either partnership or foreign control when the international relative profitability of the domestic resource endowment is high or intermediate, and home control with low relative profitability. We test these predictions using a new dataset on petroleum ownership structures for up to 68 countries between 1867-2008, finding strong empirical support for the theoretical results.

This paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environmental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdeveloped financial sectors are unable to efficiently channel loans to RE producers. The influence of financial sector development on the use of renewable energy resources is confirmed in panel data estimations on up to 119 non-OECD countries for 1980 2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non-hydropower RE such as wind, solar, geothermal and biomass. There is also evidence that the development of the RE sector has picked up significantly in the period since the adoption of the Kyoto Protocol.