Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155588
Authors: 
Andersen, Jørgen Juel
Nordvik, Frode Martin
Tesei, Andrea
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6346
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 finance 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.
Subjects: 
natural resources
conflict
JEL: 
O13
D74
Q34
Q35
Document Type: 
Working Paper

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