Are All Resources Cursed? Coffee, Oil and Armed Confict in Colombia

Oeindrila Dube and Juan Vargas

No 2024, Documentos de CERAC from CERAC -Centro de Recursos para el Análisis de Conflictos

Abstract: The Resource Curse" posits a positive association between the value of natural commodities and civil conflict. In this paper, we suggest that the value-to-violence relationship differs across commodities, and that the factor intensity of production determines whether a rise in the price of a legally traded good will exacerbate conflict. We exploit exogenous price shocks for coffee and oil to test this hypothesis, using data on politically-motivated violence in Colombia over 1988 to 2004. We find that a drop in coffee prices during the 1990s led to a disproportionate rise in conflict in the coffee areas. Poverty dynamics follow a similar pattern, while substitution into drug crops do not, which suggests that it is the fall in income rather than the drug trade that fuelled this effect. In contrast, we find that oil prices are positively related to clashes with government forces, and that state revenue is used to strengthen military presence in oil areas. Our results suggest that the income channel is critical in determining how price shocks to labor-intensive commodities affect insurgency. However, for capital-intensive goods, the revenue effect predominates in mediating how the value of the commodity affects violence."

Keywords: Colombia; Civil War; Resource Curse; Difference in Differences (search for similar items in EconPapers)
JEL-codes: D74 Q1 (search for similar items in EconPapers)
Pages: 54
Date: 2006-12-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Resource Curse in Reverse: The Coffee Crisis and Armed Conflict in Colombia (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000150:002024

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