The inequality-resource curse of conflict: Heterogeneous effects of mineral deposit discoveries

Working Paper 2016/46 published by the United Nations University World Institute for Development Economics Research (UNU-WIDER), Zurich, April 2016

Despite much being written on the economic and social aspects of the “resource curse” , there is no consensus as to whether and how mineral resources are linked to conflict. In this paper, the authors analyse the relationship between giant mineral deposit discoveries and the intensity of armed conflict (as measured by battle deaths) in various countries around the world since 1950.

The key observation is that the overall impact of mineral discoveries varies with respect to unit value of the commodity involved. Those with low unit values (ie low $ per tonne of ore or metal) are not easy to exploit and smuggle and the wealth generated disproportionally aids governments in their counterinsurgency efforts and helps raise the opportunity cost of fighting – and so result in an overall lower chance of conflict. Conversely, the discovery of deposits of high value metals (such as precious metals and gems) may increase incentives for rebellion and make insurgency feasible.

The study also found that discoveries in countries with high ethnic inequality increase conflict intensity to a greater extent than in countries with low ethnic inequality—this heterogeneity is likely due to grievances related to the distribution of resource rents and revenues.

A copy of the paper (and others on related topics) can be downloaded from UNU-WIDER at:

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