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Oil and Civil Conflict: On and Off (Shore)

Jørgen Andersen (), Frode Nordvik () and Andrea Tesei

No No 1/2017, Working Papers from Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School

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.

Keywords: Natural Resources; Conflict (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene
Date: 2017-01
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Working Paper: Oil and Civil Conflict: On and Off (Shore) (2017) Downloads
Working Paper: Oil and Civil Conflict: On and Off (Shore) (2017) Downloads
Working Paper: Oil and Civil Conflict: On and Off (Shore) (2017) Downloads
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