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Oil and Civil Conflict: On and Off (Shore)

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  • J�rgen Juel Andersen
  • Frode Martin Nordvik
  • Andrea Tesei

Abstract

We reconsider the relationship between oil and conflict, focusing on the location of oil resources. In a panel of 132 countries over the period 1962-2009, we show that oil windfalls increase the probability of conflict in onshore-rich countries, while they decrease this probability in offshore-rich countries. We use a simple model of conflict to illustrate how these opposite effects can be explained by a fighting capacity mechanism, whereby the government can use offshore oil income to increase its fighting capacity, while onshore oil may be looted by oppositional groups to fi-nance a rebellion. We provide empirical evidence supporting this interpretation: we find that oil windfalls increase both the number and strength of active rebel groups in onshore-rich countries, while they strengthen the government in offshore-rich ones.

Suggested Citation

  • J�rgen Juel Andersen & Frode Martin Nordvik & Andrea Tesei, 2017. "Oil and Civil Conflict: On and Off (Shore)," Working Papers No 1/2017, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    • Handle: RePEc:bny:wpaper:0050
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    2. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    3. Korn, Tobias & Stemmler, Henry, 2022. "Your Pain, My Gain? On the Trade Relocation Effects from Civil Conflict," VfS Annual Conference 2022 (Basel): Big Data in Economics 264095, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Natural Resources; Conflict;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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