This article examines the interaction effects of resource rents and political institutions on internal conflicts in a panel of 29 Sub-Sahara African countries from 1983 to 2018. Relying on the system generalized method of moments (SGMM) estimator that controls for instrument proliferation, we find robust evidence of the adverse interaction effects between resource rents and political institutions on internal conflicts. Comprehensive marginal effect analysis on both variables reveals the following significant findings. First, there is a (broad) U-shaped marginal effect of resource rents and political institutions. Second, when each component of resource rents was analyzed, only oil and mineral rents had a negative and statistically significant interaction effect with political institutions on internal conflicts. The U-shaped marginal effects hold only for oil rents (but become narrower), while mineral rents exhibit only an L-shaped marginal effect at low levels of political institutions. Our findings are robust to a broad set of alternative measures of political institutions and alternative specifications of the interaction term.
AbdlazizR. A., NaseemN. A. M., & SlesmanL. (2022). Oil revenue and agriculture value-added in oil-exporting countries: Does the role of real exchange rate matter?International Journal of Energy Sector Management, 16(1), 171–190.
2.
AcemogluD., GolosovM., TsyvinskiA., & YaredP. (2012). A dynamic theory of resource wars. Quarterly Journal of Economics, 127(1), 283–331.
3.
AhmadovA. K. (2014). Oil, democracy, and context: A meta-analysis. Comparative Political Studies, 47(9), 1238–1267.
4.
AhmadovI., MammadovJ., & AslanliK. (2013). Assessment of institutional quality in resource-rich Caspian basin countries. Available at SSRN. https://ssrn.com/abstract=2274813
5.
AjideK. B. (2021). Democracy, regime durability and terrorism in Africa. Defence and Peace Economics, 32(5), 550–571.
6.
AjideK. B., & RaheemI. D. (2020). Does democracy really fuel terrorism in Africa?International Economic Journal, 34(2), 297–316.
7.
AlaoA., & OlonisakinF. (2000). Economic fragility and economic fluidity: Explaining natural resources and conflicts. International Peacekeeping, 7(4), 23–36.
8.
AnyanwuJ. C. (2014). Oil wealth, ethno-religious-linguistic fractionalization and civil wars in Africa: Cross-country evidence. African Development Review, 26(2), 209–236.
9.
AnyanwuJ. C., & ErhijakporA. E. O. (2014). Does oil wealth affect democracy in Africa?African Development Review, 26(1), 15–37.
10.
ArellanoM., & BondS. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297.
11.
ArellanoM., & BoverO. (1995). Another look at the instrumental-variable estimation of error-components models. Journal of Econometrics, 68(1), 29–52.
12.
ArezkiR., & GylfasonT. (2013). Resource rents, democracy, corruption and conflict: Evidence from Sub-Saharan Africa. Journal of African Economies, 22(4), 552–569.
13.
AutyR. M. (1993). Sustaining development in mineral economies: The resource curse thesis. Routledge.
14.
BalliH. O., & SørensenB. E. (2013). Interaction effects in econometrics. Empirical Economics, 45, 583–603.
15.
BasedauM., & LayJ. (2009). Resource curse or rentier peace? The ambiguous effect of oil wealth and oil dependence on violent conflict. Journal of Peace Research, 46(6), 757–776.
16.
BeckT., ClarkeG., GroffA., KeeferP., & WalshP. (2001). New tools in comparative political economy: The database of political institutions. World Bank Economic Review, 15, 165–176. http://hdl.handle.net/10986/17216
17.
BermanN., CouttenierM., RohnerD., & ThoenigM. (2017). This mine is mine! How minerals fuel conflicts in Africa. American Economic Review, 107(6), 1564–1610.
18.
BlundellR., & BondS. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143.
19.
BodeaC., & ElbadawiI. A. (2007). Riots, coups and civil war: Revisiting the greed and grievance debate(Policy Research Working Paper No. WPS 4397). World Bank. https://documents1.worldbank.org/curated/en/324371468153540619/pdf/wps4397.pdf
20.
BodeaC., ElbadawiI., & HouleC. (2017). Do civil wars, coups and riots have the same structural determinants?International Interactions, 43(3), 537–561.
21.
BodeaC., HigashijimaM., & SinghR. J. (2016). Oil and civil conflict: Can public spending have a mitigation effect?World Development, 78(February), 1–12.
22.
BogaardsM. (2007). Measuring democracy through election outcomes: A critique with African data. Comparative Political Studies, 40(10), 1211–1237.
23.
BramborT., ClarkW. R., & GolderM. (2006). Understanding interaction models: Improving empirical analyses. Political Analysis, 14(1), 63–82.
24.
BrunnschweilerC. N., & BulteE. H. (2008). The resource curse revisited and revised: A tale of paradoxes and red herrings. Journal of Environmental Economics and Management, 55(3), 248–264.
25.
BulteE., & DamaniaR. (2008). Resources for sale: Corruption, democracy and the natural resource curse. The BE Journal of Economic Analysis & Policy, 8(1), 1–28.
26.
CaselliF., MorelliM., & RohnerD. (2015). The geography of inter-state resource wars. Quarterly Journal of Economics, 130(1), 267–315.
27.
CollierP., & HoefflerA. (2004). Greed and grievance in civil war. Oxford Economic Papers, 56(4), 563–595.
28.
CollierP., & HoefflerA. (2005). Resource rents, governance, and conflict. Journal of Conflict Resolution, 49(4), 625–633.
29.
CollierP., & HoefflerA. (2012). High-value natural resources, development, and conflict: Channels of causation. In LujalaP. & RustadS. A. (Eds.), High-value natural resources and post-conflict peacebuilding (pp. 313–328). Routledge.
30.
CollierP., HoefflerA., & RohnerD. (2009). Beyond greed and grievance: Feasibility and civil war. Oxford Economic Papers, 61(1), 1–27.
31.
CollierP., Van Der PloegR., SpenceM., & VenablesA. J. (2010). Managing resource revenues in developing economies. IMF Staff Papers, 57(1), 84–118.
32.
CordenW. M., & NearyJ. P. (1982). Booming sector and de-industrialisation in a small open economy. Economic Journal, 92(368), 825–848.
33.
CostelloM. (2018). Oil and gas rents and civilian violence in the Middle East and North Africa, 1990–2004: A resource curse, or rentier peace?Social Sciences, 7(3), 39.
34.
Dal BóE., & Dal BóP. (2011). Workers, warriors, and criminals: Social conflict in general equilibrium. Journal of the European Economic Association, 9(4), 646–677.
35.
De SoysaI., & NeumayerE. (2008). Disarming fears of diversity: Ethnic heterogeneity and state militarization, 1988—2002. Journal of Peace Research, 45(4), 497–518.
36.
Di JohnJ. (2011). Is there really a resource curse: A critical survey of theory and evidence. Global Governance, 17(2), 167–184.
37.
EasterlyW. (2001). Can institutions resolve ethnic conflict?Economic Development and Cultural Change, 49(4), 687–706.
38.
ElbadawiI. A., & SotoR. (2015). Resource rents, institutions, and violent civil conflicts. Defence and Peace Economics, 26(1), 89–113.
39.
EstebanJ., MayoralL., & RayD. (2012). Ethnicity and conflict: Theory and facts. Science, 336(6083), 858–865.
40.
FagbemiF., & AdeoyeG. (2020). Nigerian governance challenge: Exploring the role of natural resource rents. Global Journal of Emerging Market Economies, 12(3), 335–358.
41.
FarzaneganM. R., LessmannC., & MarkwardtG. (2018). Natural resource rents and internal conflicts: Can decentralization lift the curse?Economic Systems, 42(2), 186–205.
42.
FearonJ. D. (2005). Primary commodity exports and civil war. Journal of Conflict Resolution, 49(4), 483–507.
43.
FearonJ. D., & LaitinD. D. (2003). Ethnicity, insurgency, and civil war. American Political Science Review, 97(1), 75–90.
44.
FrankelJ. A. (2012). The natural resource curse: A survey of diagnoses and some prescriptions. In ArezkiR., PattilloC., QuintynM., & ZhuM. (Eds.), Commodity price volatility and inclusive growth in low-income countries (pp. 7–34). International Monetary Fund.
45.
GunitskyS. (2015). Lost in the gray zone: Competing measures of democracy in the former Soviet republics. In CooleyA. & SnyderJ. (Eds.), Ranking the world: Grading states as a tool of global governance (pp. 112–150). Cambridge University Press.
46.
HansenL. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica, 50(4), 1029–1054.
47.
HeniszW. J. (2000). The institutional environment for economic growth. Economics & Politics, 12(1), 1–31.
48.
HenriP. A. O. (2019). Natural resources curse: A reality in Africa. Resources Policy, 63, 101406.
49.
HumphreysM. (2005). Natural resources, conflict, and conflict resolution: Uncovering the mechanisms. Journal of Conflict Resolution, 49(4), 508–537.
50.
IshamJ., WoolcockM., PritchettL., & BusbyG. (2005). The varieties of resource experience: Natural resource export structures and the political economy of economic growth. World Bank Economic Review, 19(2), 141–174.
51.
KoubiV., SpilkerG., BöhmeltT., & BernauerT. (2014). Do natural resources matter for interstate and intrastate armed conflict?Journal of Peace Research, 51(2), 227–243.
52.
Le BillonP. (2010). Oil and armed conflicts in Africa. African Geographical Review, 29(1), 63–90.
53.
LujalaP. (2010). The spoils of nature: Armed civil conflict and rebel access to natural resources. Journal of Peace Research, 47(1), 15–28.
54.
LujalaP., & RustadS. A. (2012). High-value natural resources: A blessing or a curse for peace?Sustainable Development Law & Policy, 12(1), 7.
55.
MarshallM. G., GurrT. R., & JaggersK. (2014). Polity IV project: Political regime characteristics and transitions, 1800–2013. Center for Systemic Peace. http://www.systemicpeace.org/polity/polity4.htm
56.
MehlumH., MoeneK., & TorvikR. (2006a). Cursed by resources or institutions?World Economy, 29(8), 1117–1131.
57.
MehlumH., MoeneK., & TorvikR. (2006b). Institutions and the resource curse. Economic Journal, 116(508), 1–20.
58.
MenaldoV. (2016). The institutions curse: Natural resources, politics, and development. Cambridge University Press.
59.
MurshedS. M., & GatesS. (2005). Spatial–horizontal inequality and the Maoist insurgency in Nepal. Review of Development Economics, 9(1), 121–134.
60.
MurshedS. M., & TadjoeddinM. Z. (2009). Revisiting the greed and grievance explanations for violent internal conflict. Journal of International Development, 21(1), 87–111.
61.
OyinlolaM. A., AdeniyiO. A., & RaheemI. D. (2015). Natural resource abundance, institutions and economic growth in Africa. African Journal of Economic and Sustainable Development, 4(1), 34–48.
62.
PiperA. T. (2015). Sliding down the U-shape? A dynamic panel investigation of the age-well-being relationship, focusing on young adults. Social Science & Medicine, 143, 54–61.
63.
RoodmanD. (2009). A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics, 71(1), 135–158.
64.
RossM. L. (1999). The political economy of the resource curse. World Politics, 51(2), 297–322.
65.
RossM. L. (2001). Does oil hinder democracy?World Politics, 53(3), 325–361.
66.
RossM. L. (2004). What do we know about natural resources and civil war?Journal of Peace Research, 41(3), 337–356.
67.
RossM. L. (2006). A closer look at oil, diamonds, and civil war. Annual Review of Political Science, 9, 265–300.
68.
RossM. L. (2009). Oil and Democracy Revisited. UCLA Department of Political Science. https://www.sscnet.ucla.edu/polisci/faculty/ross/papers/working/Oil%20and%20Democracy%20Revisited.pdf
69.
RossM. L. (2012). The oil curse: How petroleum wealth shapes the development of nations. Princeton University Press.
70.
SegalP. (2011). Resource rents, redistribution, and halving global poverty: The resource dividend. World Development, 39(4), 475–489.
71.
SiddiquiD. A., & AhmedQ. M. (2013). The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation. Structural Change and Economic Dynamics, 24, 18–33.
72.
SlesmanL., BaharumshahA. Z., & Azman-SainiW. N. W. (2019). Political institutions and finance-growth nexus in emerging markets and developing countries: A tale of one threshold. The Quarterly Review of Economics and Finance, 72, 80–100.
73.
SlesmanL., BaharumshahA. Z., & Ra’eesW. (2015). Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC). Economic Modelling, 51, 214–226.
74.
TaydasZ., & PeksenD. (2012). Can states buy peace? Social welfare spending and civil conflicts. Journal of Peace Research, 49(2), 273–287.
75.
Van der PloegF. (2011). Natural resources: Curse or blessing?Journal of Economic Literature, 49(2), 366–420.
76.
WickK., & BulteE. H. (2006). Contesting resources–rent-seeking, conflict and the natural resource curse. Public Choice, 128(3), 457–476.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
