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Natural resource extraction and civil conflict

  • Janus, Thorsten

Based on evidence linking natural resources to civil conflict, this paper studies two armed groups fighting to control a resource and possibly a second prize. Labor is used in the agricultural, resource extraction and conflict sectors, and the groups also buy a capital input to conflict subject to the constraint that capital spending cannot exceed resource earnings. I find that exogenous shocks can have different effects on conflict intensity depending on whether the credit constraint binds. In particular, international policies to ban natural resource exports from conflict zones (e.g. ‘blood diamonds’), raise agricultural productivity or limit the import of weapons will limit conflict intensity if the credit constraint binds. However, if the credit constraint does not bind, then the first two policies promote conflict, and so could even the third policy. The results therefore suggest some caution in international policymaking.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 97 (2012)
Issue (Month): 1 ()
Pages: 24-31

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Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:24-31
DOI: 10.1016/j.jdeveco.2011.01.006
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  1. Blattman, Christopher & Miguel, Edward, 2009. "Civil War," Center for International and Development Economics Research, Working Paper Series qt90n356hs, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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  4. Christa N. Brunnschweiler & Erwin Bulte, 2008. "Natural Resources and Violent Conflict: Resource Abundance, Dependence and the Onset of Civil Wars," CER-ETH Economics working paper series 08/78, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
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  8. Bulte, Erwin & Wick, Katharina, 2005. "Contesting Resources - Rent Seeking, Conflict and the Natural Resource Curse," Proceedings of the German Development Economics Conference, Kiel 2005 36, Verein für Socialpolitik, Research Committee Development Economics.
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  12. Deininger, Klaus, 2003. "Causes and consequences of civil strife - micro-level evidence from Uganda," Policy Research Working Paper Series 3045, The World Bank.
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  16. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
  17. Päivi Lujala & Nils Petter Gleditsch & Elisabeth Gilmore, 2005. "A Diamond Curse?," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 538-562, August.
  18. Michael L. Ross, 2004. "What Do We Know about Natural Resources and Civil War?," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 337-356, May.
  19. Rubin, Barnett R., 2000. "The Political Economy of War and Peace in Afghanistan," World Development, Elsevier, vol. 28(10), pages 1789-1803, October.
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