Extractive Industries, Institutions and Social Conflict

We have convincing empirical evidence that (particularly poor) resource-dependent states are more frequently afflicted by social upheaval. But under what conditions do natural resources trigger intrastate conflict? To assess this question, my colleagues and I analyzed a range of potential contextual factors: countries’ electoral and political systems, ethnic diversity and resource ownership patterns.

Ethnic fractionalization and exclusion seem to increase the risk of armed conflict onset within oil abundant states. We found that the combination of oil and a shared identity helps overcoming the collective action problems associated with rebellion, thereby spurring ethnic violence. In another paper, I examined political conditions leading to armed conflict within petrostates and showed that – in the presence of natural resources like oil – a non-competitive multi-party system prompts social unrest.

Another important contextual factor is how states regulate the access to their natural resources. My country-level analysis for example indicates that only the extraction of oil and gas by national oil companies (compared to privately-controlled extraction) influences countries’ risk of facing armed conflict.