Natural resources, Quality of Government and Civil Conflict

Abstract: Previous research has identified natural resources as an important determinant of civil conflict. The dominant explanation has been that natural resources provide critical opportunity structures for rebellion, either directly through rebel looting or indirectly through resource-induced state weakness. Recent research has advocated a more conscious discussion of how state, regime and economic institutions enter into this picture. One question that has not yet been systematically examined is whether resource wealth is more de-stabilizing in some political contexts than in others. This paper hence develops the idea, suggested but under-theorized in previous research, that the effect of resource wealth on political order is contingent on the quality of government. More specifically I argue that the discriminatory power of state incumbents in managing resource rents and the degree of impartial implementation of redistributive policies determine whether natural resources promote peace or fuel the risk of conflict. With this rationale I introduce the level of state corruption as a mediating variable in this relationship, and put forward two divergent arguments for the implications of corruption for the resource-conflict predicament. The first mechanism - “the erosion of reciprocal commitment” - holds that corruption aggravates the pressure on equitable distribution induced by resource wealth and precipitates armed contestation over state power. The second mechanism - “the co-optation argument” - holds the opposite prediction. Corruption can buy civil peace because it allows rulers to retain allegiance through economic inducements, co-opt political opponents and intensify collective action problems in rebel formation. The paper examines the relative merit of the two arguments using a cross-sectional time series data set with global coverage from 1984 to 2002. Both corruption and natural resource endowment per se seem to heighten the risk of civil conflict. However, the presence of resource wealth in an institutional context of high corruption seems to render the onset of an internal armed conflict less likely, hence lending support to the co-optation argument.