Third-Party Interest, Resource Value, and the Likelihood of Conflict

Giacomo Battiston (), Matteo Bizzarri and Riccardo Franceschin ()
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Giacomo Battiston: University of Padova
Riccardo Franceschin: Sabanci University

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Resource wealth induces predation incentives but also conflict-deterring third-party involvement. As a result, the relation between resource value and conflict probability is a priori unclear. This paper studies such relation with a flexible theoretical framework involving a resource holder, a predator, and a powerful third party. First, we show that, if third-party incentives to intervene are sufficiently strong, conflict probability is hump-shaped in the resource value. Second, we theoretically establish that resource value increases the third party's incentive to side with the resource-rich defendant in case of intervention, providing another mechanism for stabilization when the resource value is high. Third, exploiting widely-used measures of resource value and geologic predictors of oil presence, we provide evidence for our theoretical results. Using data on military bases and arms' trade, we show suggestive evidence that US military inuence drives a non-monotonicity of conflict probability in oil value.

Keywords: conflict; resource curse; third party; oil; intervention. (search for similar items in EconPapers)
JEL-codes: D74 P48 Q34 (search for similar items in EconPapers)
Date: 2021-12-03, Revised 2022-06-20
New Economics Papers: this item is included in nep-dev and nep-ene
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Related works:
Journal Article: Third-party interest, resource value, and the likelihood of conflict (2025)
Working Paper: Third-Party Interest, Resource Value, and the Likelihood of Conflict (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:631

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