Oil price shocks and conflict escalation: onshore versus offshore

Andersen, Jørgen Juel, Nordvik, Frode Martin and Tesei, Andrea (2022) Oil price shocks and conflict escalation: onshore versus offshore. Journal of Conflict Resolution, 66 (2). 327 - 356. ISSN 0022-0027

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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 escalate conflict in onshore-rich countries, while they de-escalate conflict in offshore-rich countries. We use a model 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 finance a rebellion. We provide empirical evidence supporting this interpretation: we find that oil price windfalls increase both the number and strength of active rebel groups in onshore-rich countries, while they strengthen the government in offshore-rich ones.

Item Type:	Article
Official URL:	https://journals.sagepub.com/home/jcr
Additional Information:	© 2021 The Authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HN Social history and conditions. Social problems. Social reform J Political Science > JC Political theory
Date Deposited:	09 Feb 2022 17:21
Last Modified:	30 Apr 2024 03:21
URI:	http://eprints.lse.ac.uk/id/eprint/113703

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