A central theoretical contribution of this study is to reconcile these competing
claims. I develop a formal model that elucidates a mechanism through which resource
rents promote democracy. My analysis of this model does not contradict the claim that
resource wealth promotes authoritarianism, because, as the model shows, there are also
mechanisms through which resource wealth has an “authoritarian” effect: in particular,
economic conflict over the distribution of rents increases the incentives of elites to block
or reverse democratization and therefore provides a “direct” link between resource wealth
and authoritarianism. Yet there is also an important “indirect” effect of resource wealth,
working through the effect of resource rents on taxation. By reducing the extent to which
democratic majorities want to redistribute other forms of income or wealth away from
rich elites, resource rents reduce the economic cost of democracy for elites. The strength
of the model is that it allows us to compare these “direct” and “indirect” effects and thereby generate hypotheses about when and where resource wealth is more likely to support authoritarianism or democracy.