Oil Price Shocks and Conflict Escalation

Onshore versus Offshore

Bibliographic Data

ID6284376
AuthorsJørgen Juel Andersen (BI Norwegian Business School, Oslo, Norway), Frode Martin Nordvik (Kristiania University College, Kristiania, Norway), Andrea Tesei (0000-0002-5361-0916, Queen Mary University of London, CEP (LSE), CEPR & CESifo, London, United Kingdom, corresponding author)
Year2022
Volume66
Issue2
Pages327-356
Publication date2022-02-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Conflict Resolution (JOURNAL)
Journal identifiersISSN: 0022-0027 • E-ISSN: 1552-8766
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/00220027211042664
OpenAlexW3209784568
LanguageEN
Citations received10
References cited40

We reconsider the relationship between oil and conflict, focusing on the location of oil resources. In a panel of 132 countries over the period 1962-2009, we show that oil windfalls escalate conflict in onshore-rich countries, while they de-escalate conflict in offshore-rich countries. We use a model to illustrate how these opposite effects can be explained by a fighting capacity mechanism, whereby the government can use offshore oil income to increase its fighting capacity, while onshore oil may be looted by oppositional groups to finance a rebellion. We provide empirical evidence supporting this interpretation: we find that oil price windfalls increase both the number and strength of active rebel groups in onshore-rich countries, while they strengthen the government in offshore-rich ones

Business · Developing country · Econometrics · Economic growth · Economics · Empirical evidence · Government (linguistics · Monetary economics · Natural resource economics · Oil price · Oil reserves · Panel data · Petroleum · Submarine pipeline · Geology · Global Energy Security and Policy · Market Dynamics and Volatility · Natural Resources and Economic Development

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Open DOIOpen Access