Volume 74, December 2021,
Author links open overlay panelSnow Sini a
, A.S. Abdul-Rahim a
, Chindo Sulaiman abShow moreShareCite
https://doi.org/10.1016/j.resourpol.2021.102268Get rights and content
Highlights
- •This research paper investigates the impact of natural resources on conflict in 54 African countries.
- •The study applies novel quadratic regression model and threshold estimation.
- •The findings show that indicators of natural resources are significant in influencing violence in Africa.
- •Policies on natural resources should be priotised in order to mitigate conflict.
Abstract
This paper examines the influence of natural resources on conflict over the 2010–2019 period in 54 African countries using a novel quadratic regression model and threshold estimation. The choice of the study’s time period was based on violence vulnerability and data availability. The threshold technique and quadratic regression were used as natural resources are theorized to have a U-shape relationship with conflict. The empirical findings show that indicators of natural resources have significant positive effect on violence in Africa at 0.01 significant level. To maintain a conflict-free economy, low unemployment and decreased population growth rates are crucial to resolving the threat of conflict. Thus, policies targeted at reducing the conflict should focus on eliminating or reducing unemployment and control population growth rate. Policies should further ensure that natural resources exploitation and revenue sharing from the resource should be equitable, which can greatly mitigate conflict.
Introduction
Rise in conflict has been a major concern considering its damaging impact on both the economy and human life. The degree of conflict and other civil unrest in the World is increasing rapidly and have been regarded as the global threat to economic development and human survival. The recent natural resource discourse and policy can be explained by the so-called “natural resource curse”. The idea of natural resource curse is that the abundance of natural resources such as crude oil, natural gas, coal, and mineral wealth in developing nations results in negative economic outcome such as different forms of conflicts, impoverished economic growth, corruption, and ineffective governance (Tandi and Mishra, 2020; Polterovich et al., 2010; Sachs and Warner, 2001). Resources in many developing nations are believed to be a curse instead of a blessing (Tandi and Mishra, 2020; Zuo and Jack, 2014; Polterovich et al., 2010; Brunnschweiler, 2008; Sachs and Warner, 2001). Adhvaryu, Fenske, Khanna, and Nyshadham (2021) revealed that countries bordering resource endowed nations face violent conflict. In other words, resources have fuelled violence and underdevelopment in both resource-abundant countries and neighbouring African countries. Furthermore, according to Conrad et al. (2019), natural resources enable rebel groups to participate in conflict and lengthen the cycle of conflict in resource-rich nations due to benefit gained from resource theft, extortion, and smuggling.
Some researches however provide mixed findings. For instance, Buonanno et al. (2015) reported that an abundance of natural resources is both a blessing and a curse in their study. Also, Vesco et al. (2020)’s findings show that both natural resource surplus and its scarcity are associated with a higher likelihood of violent conflict.
Historically, the negative perspective of natural resource existence goes against the early findings and views on the subject matter. Earlier scholars such as Adam Smith, Walter Rostow, and David Ricardo held the view that nations that are endowed with natural resources tend to experience economic development as these natural resources are vital for sustained peace and growth. On the other hand, the recent scholars hold the opinion that nations which are endowed with resources tend to experience conflict and slow economic growth than natural resource-poor countries (see, Sachs and Warner, 1995; Sachs and Warner, 2001; Karl, 1997; Fearo & Laitin, 2005). The present role which these resources play in Africa and other developing countries are arguably different from what was witnessed in beginning of 20th century in developed nations such as Canada and America. In the 21st century, researchers have seen that resource-abundant countries, specifically in Sub-Saharan Africa, Middle East, and Latin America have witnessed conflict and slow economic growth rate compared to countries with fewer or no resources. This scenario is what is referred to as a resource curse (Auty, 1990, 1993, 1993). The curse has inspired several economists and researchers to investigate this assertion in many countries. The famous and early explanation of resources curse hypothesis is the structuralist, rent-seek analyses, and Dutch disease argument (Prebisch, 1950; Tornell and Lane, 1999; Baland and Francois, 2000; Torvik, 2002, 2009). This led to the surfacing of many works challenging the view that resource endowment is a curse for developing countries.
Natural resource-conflict relations are fully influencing current literature on vicinity studies and international relations to the economy (Bayramov, 2018). The natural resource theory emerged in the late 1980s as a way to address economic tensions in resource-rich countries (Ross, 2004; and Andersen and Ross, 2014). Sachs and Warner (1995) conducted a study on natural resource hypothesis argument and reported that natural resource curse hypothesis holds in resource abundance countries. Furthermore, oil in developed nations was reported to weaken the economy and the institutional and democratic abilities of the economy, thereby making communities susceptible to violent conflict (Ross, 2004; Andersen and Ross, 2014).
Natural resources induced conflicts are related to over 1000 battle-related deaths per year (Bruch et al., 2019). Natural resources have sparked many conflicts from various perspectives (Scholvin, 2016; Bruch et al., 2019; Beevers, 2019). Meanwhile, empirical proof of how natural resource-conflict was triggered has been questioned by many studies such as O’Brochta (2019), Koubi et al. (2014), and Ross (2015). Though the explanation for these resources induced conflicts are not restricted to political and socio-economic variables such as cultural division (i.e., religion, race, or tribe), technical advances, colonial imperialism, revenue-sharing formulas, population demography, and institutional quality (Koubi et al., 2014; Schilling et al., 2018). Natural resources in Africa are linked to conflict not only as a result of the aforementioned reasons, but also as a result of increased natural resource dependency, rivalry among and between ethnic tribes, states, and countries on the continent (Warner, 2000; Ostrom, 1990). Africa is made up of various cultures and tribes and consists of 54 autonomous countries and 8 protectorates. Furthermore, due to poor natural resource management, the resource endowed areas in most developing countries are denied a good share of the revenue produced from sales and export of resource extracted, leaving the region where the resource was discovered polluted and underdeveloped (Warner, 2001; Fisher et al., 2000).
Resources cause conflict through certain mechanisms. These mechanisms can either prolong or shorten conflict depending on their proclivity to occur and whether or not they have a major effect as evidenced by some case studies. Greed, grievance, and looting are three mechanisms that can lead to conflict over natural resources. Countries that rely heavily on natural resources and agricultural products as main or primary export commodities are especially vulnerable to violent conflicts (Collier and Hoeffler, 2004). Aside from the social-environmental processes that lead to resource conflicts (Schellens, 2020), there is a social and political structural mechanism. In an attempt to understand the relationship between resources and conflict, it is argued that the process by which natural resources result in conflict can be articulated either through grievances or greed with various variants such as marginalization, ethnics, and secession agitation. According to the looting mechanism, resource endowment would prolong the war by providing a channel for rebels to gain funds and thus advance combat rather than being defeated or forced to compromise (UN Panel of Experts, 2000; UN Panel of Experts, 2001; UN Panel of Experts, 2002). For instance, current conflicts in natural resource-rich African countries such as Angola, Nigeria, Liberia, Cong, the Democratic Republic of the Congo, and Sierra Leone point to this looting process. The domestic rebel groups engaged in the quasi-criminal activity to drive some benefit from resources. Thus, natural resources increase the valuable prize of conquering to gain control of the country (Fearon & Laitin, 2003). Also, when resources are concentrated in one area of a nation, it can cause discontent among groups that are experiencing injustice and may cause some groups to pursue secession (Ross, 2001).
Natural resources and conflict relationship have been debated and argued differently. Some researchers presented ample evidence that resource wealth is correlated with several negative economic development effects (e.g., Bhattacharyya and Hodler, 2010; Fum and Hodler, 2010: Kim et al., 2020; Hartwell et al., 2021; Adhvaryu et al., 2021). This argument is however inconclusive. Second, social and political factors encourage some resource-rich countries to use their resources to advance development while discouraging other resource-rich countries from doing so. Third, private businesses use scientific research on natural resources to tackle underdevelopment. Understanding the relationship between natural resource and conflict is critical in resolving and eradicating conflict. It serves as a reference in promoting and mediating institutions on good practice surrounding resource conflicts and peacebuilding (UNEP, 2021).
The latest empirical finding such as Faha (2021) reveals that different natural resources have a unique impact on conflict in terms of turning point and shape of the relationship. The study revealed a non-linear significant impact of natural resources on the conflict in 124 countries from 1984 to 2017 by utilizing the panel smooth transition estimation technique. Within this framework, vital empirical research results have shown that conflict is critically impacted by natural resources wealth (Theisen, 2012a,b; Sorens, 2011; Lujala, 2009, 2010; Thies, 2010a,b; Brunnschweiler and Bulte, 2009; Bellows and Miguel, 2009; Basedau and Lay, 2009; Lujala et al., 2005; Ross, 2004). This impact brings about the poor economic impact and has captured the attention of economists and researchers regarding its role in causing conflicts in Africa. The number of natural resources discovery in Africa is on an increase and it is viewed as one of the world’s natural resource hub (Africa Natural Resources Centre, 2019). Natural resources have contributed the most in increasing conflict in Africa (Alao, 2007).
The contribution of this paper to conflict and natural resources literature is in two dimensions. First, we investigate the natural resource curse in a more apt nonlinear framework deploying dynamic threshold technique (Kremer et al., 2013; Sirag et al., 2018). In this regard, the impact of natural resources on conflict may follow U-shape or inverted U-shape form (see Nillesen and Bulte, 2014). Thus, the use of threshold technique to analyse the turning point of natural resources discovery is necessary. Second, while previous studies examined the natural resource curse by looking at Sub-Saharan Africa countries data, the validity of the natural resources curse documented in previous studies is still not clear. Thus, this paper investigates the whole 54 independent African countries to ascertain its validity. Furthermore, to the best of our knowledge, none of the previous studies have considered the likelihood of a non-linear relationship between conflict and natural resources. More so, methodologically several complexities exist in a natural resource-conflict relationship that makes analysing this link potentially tedious with basic econometric approach such as logistics regression and ordinary least squares (OLS). For example, conflict may respond to natural resources discovery differently when the populations are employed than when there are several unemployed populace. Consequently, the impact of natural resources on conflict may be heterogeneous and differ when the nation and the type of resources are of a different category (example, hydrocarbon resource-oil, coal, minerals, gas and agricultural resource-palm oil, arable crops, water resources, etc.). Thus, this paper would deploy a quadratic model and use marginal effect to estimate the links by decomposing the various resources to have a robust finding.
Concentrating on Africa, we examine the impact that natural resources have on conflict through an empirical framework that can report the aforementioned features if they are present. The study’s other sections are structured as follows. The second section discusses relevant research literature. Section three explains the methodological aspect of the study i.e., models and data. The findings are reported in the fourth section. While the fifth section concludes the study.
Section snippets
Theoretical literature on natural resources and conflict
Several theories suggest that susceptibility and tendency to partake in conflict is not invariant as regard to natural resources endowment. On the other hand, the Neo-Malthusian are of the opinion that resource scarcity signifies enhanced motivation for conflict. Though according to Fearon (1995), conflict may arise as a result of the failure of bargaining due to various reasons which are not limited to dissymmetric information, agency issues, and harmony. Thus, Conflict theories offer enough
Model specification
This segment described the econometric model deployed and shows the most relevant variables. The objective is to model potential factors which determine to what extent conflict depend on natural resources. Thus, to investigate natural resources conflict link, we adopt the model specified by Harari and Ferrara (2018) and modified the model to be:�������,�=�0+�1������,�+�2������,�+�3��,�+��+��+��,�
Equation (1) is a linear model where �������,� represents conflict, ������,� refers to natural
Results and discussion
To test the existence of the resource curse theory, we deployed the quadratic technique developed by Bramber et al. (2006). This approach captures non-linearity (both U-shape and inverted U-shape) better. The presence of a non-linear natural resource-conflict link is presented in Fig. 1, Fig. 2. The turning point value shows the validity of the threshold relationship between natural resource and conflict. The figures were plotted using the raw data to check the validity of the shapes.
The
Conclusion and policy recommendations
In this study, we investigated the validity of natural resource curse theory using an appropriate nonlinear approach via quadratic regression model and dynamic panel threshold estimator. We controlled for heterogeneity among independent Africa countries with autonomy over their natural resource extraction. Furthermore, we used GMM to estimate the quadratic model. The findings show that natural resources curse hypothesis exists.
The finding of this paper challenges the vast conventional natural
Conflict of interest
The authors declare that there is no conflict of interest.
Funding
The research work received no funding from any source.
Ethical approval
The authors have unanimously approved the submission of this paper.
Consent
The paper is submitted with the consent of all authors.
Data availability
The study’s data are available on request.
Author contribution
Snow Sini collected the data, analysed it, and wrote the draft of the paper; A. S. Abdul-Rahim and Chindo Sulaiman gauged the estimations, reviewed the paper, edited the paper, and finalized
