The impact of diamonds on economic growth,adverse regime change,and democratic state-building in Africa

Abstract

Recent studies point to how resources such as diamonds have funded insurgency movements and how their geographic presence can foment the incidence but not necessarily the onset of civil wars. Such empirical studies are based on global models; however, we believe regional effects may be present. In order to address this, we disaggregate the empirical findings based on Africa as a region. By estimating a panel study of African states, we discover that those that are secondary diamond producers are not only vulnerable to domestic strife, but also prone to lower levels of economic growth, coup d’état episodes, and state failure—conditions that inhibit democratic state-building. We also find that secondary diamond-producing states in Africa are prone to both the onset and incidence of civil wars, a finding that diverges from previous empirical work. In asking how states may obviate this curse, we affirm a claim of state developmentalism: that in order to prevent collapse, states must harness the revenue potential of diffuse resources. The regulation and legitimisation of diamond production is an effective bulwark against the potential opportunity structures that such lootables may provide to warlords, insurgents, and military factions.