Diamonds: Rebel's and Farmer's best friend

Anouk S. Rigterink

No 211, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: This paper investigates the impact of an increase in the world price of a‘lootable’, labour-intensive natural resource on the intensity of violent conflict. It suggests that such a price increase can have opposite effects at different geographical levels ofanalysis: a decrease in conflict intensity at the country level due to rising opportunity costs of rebellion, but an increase in conflict intensity in resource-rich sub-national regions, asreturns to looting rise. The paper introduces a new measure of diamondpropensity based on geological characteristics, which is arguably exogenous to conflict and can capture small-scale labour-intensive production better than existing measures. The stated effects are found for secondary diamonds, which are lootable and related to opportunity costs of fighting, but not for primary diamonds, which are neither.

Date: 2018-06-27
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:211

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