『Abstract
Although the relationship between natural resources and civil
war has received much attention, little is known about the underlying
mechanisms. Controversies and contradictions in the stylized facts
persist because resource extraction is treated as exogenous while
in reality fighting affects extraction. We study endogenous fighting,
armament, and extraction method, speed and investment. Rapacious
resource exploitation has economic costs, but can nevertheless
be preferred to balanced depletion due to lowered incentives for
future rebel attacks. With private exploitation, rebel fight more
than the government if they can renege on the contract with the
mining company, and hence government turnover is larger in this
case. Incentive-compatible license fees paid by private companies
and mining investment are lower in unstable countries, and increase
with the quality of the government army and office rents. This
implies that privatised resource exploitation is more attractive
for governments who have incentives to fight hard, i.e., in the
presence of large office rents and a strong army. With endogenous
weapon investments, the government invests more under balanced
than under rapacious or private extraction. If the government
can commit before mining licenses are auctioned, it will invest
more in weapons under private extraction than under balanced and
rapacious nationalized extraction.
Keywords: conflict; natural resources; private resource exploitation;
mining investment; license fee』
1. Introduction
2. Stylized empirical facts
2.1. The impact of natural resources on civil wars: empirical
results
2.2. Measurement problems and endogenity
2.3. The impact of political instability on natural resource
extraction
2.4. Other stylized facts
3. Modelling resource conflict and private versus public resource
exploitation
3.1. Benchmark: Peace and the cooperative outcome
3.2. Fighting under balanced nationalized exploitation
3.3. Fighting under rapacious nationalized exploitation
3.4. Fighting and incentive compatible license fee under private
exploitation
3.5. Comparing the payoffs under nationalized and privatized
extraction
4. Endogenous private mining investments
5. Government investment in weapons
6. Bribing rebels
7. Discussion
8. Conclusions
References
Appendix: Description of data used in section 2
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endog. to fight |
Onsets and Incidence | |||
De Soysa (2002), Fearon and Laitin (2003), Fearon (2005) |
Oil exporter dummy, fuel exports / total exports | Both measures increase war onsets | No |
Collier and Hoeffler (2004), Collier et al. (2009) |
Primary exports / GDP | Increases ar onsets (inverted U-shape) | No |
Fearon (2005), Brunnschweiler and Bulte (2009) |
Primary exports / GDP (with further robustness checks and instrumented) | The effect of primary exports on war onsets seems not very robust | No |
Lujala et al. (2005), Lujala (2010) |
Diamond deposit, diamond production, and oil production dummies | Secondary diamonds increase onset and incidence (ethnic) war, primary diamonds decrease incidence war, (onshore) oil increases onsets | No |
Humphreys (2005) | Oil production, oil reserves, diamond production | Both oil production and diamond production increase ar onsets | No |
Ross (2006) | Fuel rents and diamond rents per capita | Fuel onshore and offshore and primary diamonds increase war onsets, secondary diamonds increase onsets separatist wars | No |
Duration and fatalities | |||
Fearon (2004), Ross (2006) |
Contraband (cocaine, gems, opium etc) dummy | Increases war duration | No |
Collier et al. (2004) | Primary exports / GDP | Level not significant. Lower price of commodities exported shortens war | No |
Lujala (2009) | Gem, drug and hydrocarbon production dummies | The presence of these measures in conflict zone increases combat deaths | No |
Lujala (2010) | Gemstones, oil reserves and production dummies | The presence of these measures in conflict zone increases duration war | No |
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