Beach holiday in Bali or East Timor? Why conflict can lead to under- and overexploitation of natural resources

In the presence of distributional conflict, one can observe overexploitation for some goods, and underexploitation for others. The present article builds a simple two-period model for the analysis of this issue. It is shown that if the natural resource is renewable, underexploitation is likely, whereas negative future externalities can lead to overuse.