van der Ploeg,F. and Rohner,D.(2010): War and natural resource exploitation. Institute for Empirical Research in Economics, University of Zurich, Working Paper Series, No.481, 30p.


 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
: Description of data used in section 2

Table 1: Overview of existing empirical evidence on the impact of natural resources on civil wars


Resource measure used

Main findings

Control extract.
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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  • Collier,P. and Hoeffler,A.(2004): Greed and grievance in civil war. Oxford Economic Papers, 56, 563-595.
  • Collier,P., Hoeffler,A. and Rohner,D.(2009): Beyond greed and grievance: Feasibility and civil war. Oxford Economic Papers, 61, 1-27.
  • Collier,P., Hoeffler,A. and Soderbom(最初のoの頭に¨),M.(2004): On the duration of civil war. Journal of Peace Research, 41, 253-273.
  • De Soysa,I.(2002): Paradise is a bazaar? Greed, creed and governance in civil war, 1989-99. Journal of Peace Research, 39, 395-416.
  • Fearon,J,(2004): Why dosome civil wars last so much longer than others? Journal of Peace Research, 41, 275-301.
  • Fearon,J.(2005): Primary commodity exports and civil war. Journal of Conflict Resolution, 49, 483-507.
  • Fearon,J. and Laitin,D.(2003): Ethnicity, insurgency, and civil war. American Political Science Review, 97, 75-90.
  • Humphreys,M.(2005): Natural resources, conflict, and conflict resolution: Uncovering the mechanisms. Journal of Conflict Resolution, 49, 508-537.
  • Lujala,P.(2009): Deadly combat over natural resources: Gems, petroleum, drugs, and the severity of armed covil conflict. Journal of Conflict Resolution, 53, 50-71.
  • Lujala,P.(2010): The spoils of nature: Armed civil coflict and rebel access to natural resources. Journal of Peace Research, 47, 15-28.
  • Lujala,P., Gleditsch,N.P. and Gilmore,E.(2005): A diamond curse? Civil war and a lootable resource. Journal of Conflict Resolution, 49, 538-562.
  • Ross,M.(2006): A closer look at oil, diamonds, and civil war. Annual Review of Political Science, 9, 265-300.