Professional Documents
Culture Documents
Axel Dreher
Department of Economics, Heidelberg University
Merle Kreibaum
German Development Institute/Deutsches Institut fur Entwicklungspolitik (DIE) & Georg-August University
Gottingen
Abstract
This article investigates the effect of natural resources on whether ethno-political groups choose to pursue their
goals with nonviolent as compared to violent means, distinguishing terrorism from insurgencies. It is hypothesized that whether or not the extraction of fossil fuels sparks violence depends both on the groups characteristics and the states reaction. Data are taken from the Minorities at Risk Organizational Behavior
(MAROB) project, covering 118 organizations in 13 countries of the Middle East and North Africa over the
19802004 period. The multinomial logit models combine group- and country-specific information and show
that ethno-political groups are more likely to resort to rebellion rather than using nonviolent means or
becoming terrorists when representing regions rich in oil. This effect is enhanced for groups already enjoying
regional autonomy or being supported by a foreign state but can be mitigated by power-sharing arrangements.
These results are thus in line with the argument that economic considerations, or greed, dominate over
political considerations, or grievances, with regard to violent conflicts. The opposite appears to hold considering terrorism, as we do not find any evidence for a resource curse here, but find an increasing effect of
political discrimination and a decreasing effect of regional autonomy.
Keywords
oil, rebellion, resource curse, terrorism
Introduction
The discovery and exploitation of oil can contribute to a
countrys economic growth and prosperity. Resourceabundance can, however, also turn into a threat to stability and peace. While this aspect of the so-called
resource-curse is widely discussed in the context of civil
wars (e.g. Fearon & Laitin, 2003; Collier & Hoeffler,
2004), it has largely been neglected in the literature
analyzing the causes of terrorism. This neglect is surprising. In a large number of countries, natural resource
abundance has disadvantaged the local population, leading to high regional unemployment and mass immigration (Karl, 2007). It thus seems straightforward that
marginalized populations in areas with a wealth of
natural resources might resort to terrorism in order
to express their grievances. This problem plays a particularly important role in the Middle East and North
Africa (MENA) region, which has a large number of
oil-rich, fragile states.
Consider Iraq. Political groups such as the Kurdistan
Democratic Party or the Patriotic Union of Kurdistan,
which represent the Kurdish minority in the north of the
country, first fought for more autonomy, then for their
own state. During the course of this fighting, they have
resorted to violent means, both at a terrorist scale and at a
larger battle-sized scale. While the public discourse of the
movement focuses on the discrimination of this largest
Corresponding author:
mail@axel-dreher.de
540
Theory
As Hunziker & Cedermann (2012) point out, the
civil war literature widely accepts the existence of a
link between petroleum and intrastate conflict. Fearon
& Laitin (2003), Humphreys (2005), and de Soysa &
Neumayer (2007), among many others, find that
countries rich in oil and gas have a higher risk of civil
war. This is attributed to a number of factors that can
broadly be classified to represent, first, greed or opportunity and, second, grievances. The greed-based hypothesis postulates that resources directly lead to rebellions or
coups because controlling an area or state rich in
resources is comparably more valuable than one without
them. The presence of natural resources has been shown
to weaken institutions, as politicians have no incentives
to develop them when they do not have to rely on a
broad tax base (e.g. Fearon & Laitin, 2003). Furthermore, resource abundance allows rebel groups easy
access to finance, making revolutions more feasible
(Collier, Hoeffler & Rohner, 2009).
However, the grievance channel to violent behavior
cannot be neglected. Karl (2007) stresses the absence of
a significant multiplier effect of oil wealth, limited
opportunities for technology diffusion, and consequently low living standards for large parts of the population in areas rich in oil. Hunziker & Cederman
(2012) point to examples of externalities that include
the reorganization of land rights, pollution, disruptions
of the labor market due to shifts in demand away from
unskilled workers, large-scale in-migration, urbanization, and rapid centralization of state powers. They find
that violent reactions of ethnic groups become likely
when members of the group feel themselves deprived
of their fair share of gains from natural resources and
when these resources incur negative externalities on
541
542
543
Clearly, when variables are correlated over time, using their lag will
not completely eliminate reversed causality and other sources of
endogeneity. To the extent that our variable of interest is positively
or negatively correlated with endogenous control variables, this could
bias its coefficient in either direction. In line with the previous
literature, we cannot correct for this bias. With respect to our main
variable of interest, natural resource abundance, violence might
reduce the amount of resources extracted, so that the estimated
coefficient would reflect a lower bound for the effect of resource
abundance on conflict. Also note that our results hold when we use
a binary variable indicating the existence of natural resources rather
than production to test robustness, which is arguably exogenous to
conflict as it is determined by geology.
7
The countries and territories included in the sample are Algeria,
Bahrain, Cyprus, Iran, Iraq, Israel, Jordan, Lebanon, Morocco, Saudi
Arabia, Syria, Turkey, West Bank, and Gaza. Data do not extend
beyond the year 2004, which limits the sample for our analysis.
8
Our nonviolence category comprises both inaction and nonviolent
political action such as protests, etc. which one could distinguish
conceptually as suggested by Chenoweth & Cunningham (2013),
among others. We are mainly interested in severe attacks on the
states monopoly of violence and therefore do not focus on this
additional separation. Empirically, while the MAROB variable
domorgprot allows us to distinguish the two, of the 1,107
observations (group-years) coded as nonviolent in our sample,
only 97 engage in nonviolent forms of protest. Results are
unchanged in a multinomial logit model with year fixed effects and
standard errors clustered at the organization level when we add
nonviolent protests as a fourth category to our model.
544
545
the group level, and also taken from the MAROB database, we control for the goals of a group. Specifically, we
include indicator variables for organizations that aim to
eliminate political, economic, or cultural discrimination,
groups that aim for autonomy or independence, and
groups that want to establish an Islamic state.12 Asal,
Pate & Wilkenfeld (2008) coded these variables based
on the expressed aims and motivations of the groups as
reported in newspapers and other sources. We expect
fighting for autonomy or independence, or an Islamic
state, to lead groups to take up arms at a larger scale as
these are goals that states do not usually give in to. Organizations with other goals are the omitted category.
We control for whether organizations receive financial, political, humanitarian or military support from
foreign states, as this is likely to fuel violence. We control
for negotiations between the state government and the
political organization, as members of the group that do
not wish to reach an agreement with the state or that
expect larger concessions when showing strength could
opt for increased violence. In addition, we include
whether or not the government uses violence against
an organization, that is, if the organization is considered
legal or if it faces lethal violence by the state. We also add
a variable indicating whether a group provided social
services as this requires a certain degree of organization
as well as financial means and thus strength.
At the country level, we rely on a number of standard
control variables from the terrorism and civil war literature. Due to our very small sample of countries, however,
we will not put a huge weight on their estimated coefficients. We control for whether or not the country is a
democracy, relying on indicators from Freedom House
(2014) for the average levels of civil liberties and political
rights, ranging between 1 and 7, with higher values indicating less freedom.13 We also include a countrys logged
GDP per capita to proxy for its level of development. As
Sambanis (2008) points out, the negative correlation
between per capita GDP and civil war is widely accepted.
GDP per capita, however, is not a robust determinant of
terrorism (Gassebner & Luechinger, 2011; Sambanis,
12
Results
Table I shows the results without interacted variables, with
nonviolence being the omitted base category. The
coefficients thus allow us to compare the choice of the two
forms of violence with respect to nonviolence. We report
relative risk ratios (or odds ratios) that can be directly interpreted with respect to the quantitative effect of the variables. These exponentiated multinomial logit coefficients
show to what extent the risk of an outcome changes relative
to the reference group following a unit change in a variable,
for constant values of the other variables in the model.14
Odds ratios larger than 1 indicate a positive correlation
between an explanatory variable and the respective outcome, while odds ratios smaller than 1 indicate negative
relationships. By testing whether the difference between
the odds ratios for our two violent outcomes is significant,
we can also compare them among each other.
We start with including our two oil variables without
any control variables (columns 1 and 2 of Table I) before
adding group characteristics (columns 3 and 4) and
finally estimating the full model (without any interactions, columns 5 and 6). As can be seen, ethno-political
groups are more likely to engage in insurgencies the
higher the value of the oil resources that were extracted
from their territory in the previous year. This effect is
robust across the different specifications. The odds ratios
in columns 2, 4, and 6 of Table I are significant at the
14
See http://www.ats.ucla.edu/stat/stata/output/stata_mlogit_
output.htm (accessed 23 April 2014).
546
Table I. Determinants of terror and insurgency, multinomial logit, 19802004, reduced form and full models without interaction effects
(1)
Terror
(2)
Insurgency
(3)
Terror
(4)
Insurgency
(5)
Terror
(6)
Insurgency
1.051
(0.545)
0.921
(0.292)
1.316y
(0.087)
0.802
(0.183)
1.024
(0.734)
0.969
(0.636)
2.390
(0.373)
0.293
(0.253)
0.696
(0.761)
0.994
(0.993)
4.319**
(0.003)
3.820
(0.326)
3.192*
(0.018)
0.349**
(0.038)
7.893**
(0.009)
1.352**
(0.004)
0.809*
(0.048)
3.544
(0.428)
0.129
(0.213)
6.526
(0.232)
1.105
(0.910)
3.551**
(0.004)
2.761
(0.631)
2.071
(0.175)
0.596
(0.376)
15.719**
(0.003)
0.986
(0.863)
1.011
(0.897)
4.638
(0.192)
0.230
(0.205)
0.401
(0.430)
0.442
(0.263)
3.455*
(0.033)
7.574
(0.208)
9.561**
(0.000)
0.314*
(0.057)
15.020**
(0.001)
5.668*
(0.014)
0.882
(0.691)
1.943y
(0.056)
0.302
(0.582)
1.374**
(0.000)
0.800*
(0.040)
15.462
(0.125)
0.740
(0.870)
5.958
(0.166)
0.765
(0.757)
3.076*
(0.017)
4.513
(0.528)
3.653y
(0.068)
1.022
(0.969)
18.315**
(0.000)
2.394
(0.165)
1.254
(0.621)
1.230
(0.558)
161.61*
(0.029)
112
5,031
842.403
107
4,146
644.081
105
3,360
424.210
Odds ratios shown. p-values in parentheses: yp < 0.1, *p < 0.05, **p < 0.01. All variables are lagged by one year and standard errors are clustered
at the organization level.
15
Given the small size of our sample, we reference 10% as the lowest
significance level to be considered statistically significant in this
study.
16
547
0.8
0.6
Prob(Peace)
Prob(Terror)
0.4
Prob(Insurgency)
0.2
0
0
6 8 10 12 14 16 18 20 22 24
Log(Group oil production)
548
Table II. Determinants of terror and insurgency, multinomial logit, 19802004, political participation
(1)
Terror
(2)
Insurgency
(3)
Terror
(4)
Insurgency
0.935
(0.465)
1.124
(0.268)
1.001
(0.961)
1.860*
(0.038)
1.300**
(0.002)
0.769**
(0.022)
1.044
(0.108)
0.668
(0.255)
0.962
(0.660)
1.826*
(0.021)
1.576**
(0.000)
0.779*
(0.053)
1.066
(0.487)
3.386
(0.347)
5.799
(0.228)
0.043*
(0.026)
0.375
(0.510)
0.447
(0.421)
1.398
(0.608)
7.108
(0.250)
4.547*
(0.028)
1.173
(0.811)
15.369*
(0.024)
25.525**
(0.001)
0.006**
(0.005)
0.630
(0.460)
4.201
(0.662)
0.744**
(0.001)
14.031*
(0.092)
32.692*
(0.032)
1.580
(0.769)
10.153y
(0.097)
0.451
(0.364)
3.086y
(0.061)
9.059
(0.304)
3.448
(0.144)
0.832
(0.814)
6.077
(0.143)
1.342
(0.698)
2.809
(0.186)
0.542
(0.126)
21,042.7**
(0.005)
1.495
(0.758)
0.047*
(0.014)
0.552
(0.578)
0.451
(0.297)
3.062y
(0.053)
5.013
(0.333)
8.248**
(0.000)
0.444
(0.168)
24.715**
(0.000)
4.336*
(0.025)
0.658
(0.211)
1.750y
(0.083)
0.244
(0.514)
21.714y
(0.071)
0.746
(0.864)
4.113
(0.192)
0.756
(0.757)
3.125*
(0.018)
3.866
(0.561)
3.834y
(0.060)
1.086
(0.867)
17.172**
(0.000)
1.858
(0.307)
1.715
(0.226)
1.130
(0.696)
255.829*
(0.015)
103
3,336
414.307
88
2,517
313.042
Odds ratios shown. p-values in parentheses: yp < 0.1, *p < 0.05, **p < 0.01. All variables are lagged by one year and standard errors are clustered
at the organization level.
2009). As can be seen in Table II, while political grievances per se increase the probability of terror by a factor
of 1.9, on average (see column 1), the interaction effect is
not significant at conventional levels. The effect of
regional fuel extraction for either type of violence does
549
Table III. Determinants of terror and insurgency, multinomial logit, 19802004, autonomy and economic discrimination
(1)
Terror
(2)
Insurgency
(3)
Terror
(4)
Insurgency
1.017
(0.828)
1.605*
(0.050)
0.541**
(0.000)
0.464
(0.487)
1.307**
(0.001)
0.846
(0.107)
1.249*
(0.031)
0.156
(0.352)
0.976
(0.778)
1.108
(0.276)
1.322**
(0.001)
0.811*
(0.036)
0.996
(0.865)
2.070**
(0.005)
1.545
(0.735)
0.065*
(0.019)
0.470
(0.476)
0.588
(0.446)
3.087y
(0.058)
5.283
(0.257)
9.217**
(0.000)
0.451
(0.206)
23.620**
(0.001)
4.528*
(0.019)
0.739
(0.321)
1.614
(0.149)
0.405
(0.681)
1.014
(0.674)
0.895
(0.734)
15.744y
(0.100)
0.779
(0.883)
4.520
(0.190)
0.932
(0.938)
3.143*
(0.017)
3.919
(0.538)
4.012y
(0.051)
1.038
(0.944)
16.872**
(0.000)
2.151
(0.195)
1.301
(0.505)
1.202
(0.569)
134.373*
(0.030)
6.752
(0.183)
0.106y
(0.087)
0.814
(0.912)
0.768
(0.784)
1.409
(0.608)
6.482
(0.252)
5.208*
(0.018)
0.786
(0.750)
7.529
(0.108)
11.445**
(0.002)
0.016*
(0.016)
0.550
(0.302)
21.279
(0.338)
5.925
(0.281)
1.144
(0.934)
10.723
(0.163)
0.650
(0.636)
2.477y
(0.096)
3.788
(0.502)
3.590
(0.125)
0.472
(0.417)
4.751
(0.261)
3.042
(0.131)
2.307
(0.278)
0.654
(0.317)
33,481.84**
(0.001)
88
2,517
315.478
103
3,336
415.383
Odds ratios shown. p-values in parentheses: yp < 0.1, *p < 0.05, **p < 0.01. All variables are lagged by one year and standard errors are clustered
at the organization level.
550
0.971
(0.716)
Log(National oil production)
1.009
(0.915)
Interaction term group oil and
1.079
foreign support
(0.192)
Goal: Eliminate discrimination
4.101
(0.233)
Goal: Autonomy, independence
0.179
(0.151)
Goal: Eliminate economic
0.447
discrimination
(0.505)
Goal: Eliminate cultural
0.443
discrimination
(0.270)
Group supported by foreign state
2.731y
(0.094)
Goal: Islamic state
7.152
(0.232)
State uses violence against group
10.234**
(0.000)
State negotiated with organization 0.283*
(0.045)
Group provides social services
16.847**
(0.000)
Log(GDP p.c.)
5.260*
(0.021)
Log(Population)
0.893
(0.714)
Freedom House
1.876y
(0.075)
Ethno-linguistic Fractionalization
0.346
(0.627)
Number of groups
Number of observations
Log-Likelihood
1.319**
(0.004)
0.796*
(0.039)
1.151*
(0.037)
12.072
(0.180)
0.498
(0.722)
6.268
(0.177)
0.717
(0.696)
1.677
(0.225)
3.950
(0.583)
4.180*
(0.048)
0.830
(0.769)
22.143**
(0.000)
2.300
(0.198)
1.274
(0.599)
1.222
(0.580)
180.203*
(0.027)
105
3,360
421.664
Odds ratios shown. p-values in parentheses: yp < 0.1, *p < 0.05, **p <
0.01. All variables are lagged by one year and standard errors are
clustered at the organization level.
19
551
when it comes to terrorism. In our approach to differentiating the two, we find political and economic discrimination to increase terrorism, but independent of oil
resources. However, while power-sharing can mitigate
the escalating impact of mineral resources, in areas that
strive for more independence, the prospect of high revenues appears to induce insurgencies. Similarly, foreign
state involvement in regions with fossil fuel reserves is
likely to spark civil wars but not terrorism.20
Conclusion
In this article, we investigate what determines ethnopolitical organizations choice between pursuing their
goals with nonviolent means and violent action, distinguishing between smaller-scale terrorist activities and
larger-scale insurgencies. Combining the two forms of
violent behavior within the same framework allows us not
only to identify determinants of violence as such but also
to distinguish between different forms of violent actions.
According to our theory, the extraction of natural
resources exerts externalities on ethnic groups populating
the regions where resources are extracted, leading to
grievances. At the same time, revenues from fossil fuels
represent important economic incentives. The consequent
risk of both terrorism and rebellion depends on the
groups characteristics as well as the states reaction to its
actions. Based on this reasoning, we run a multinomial
logit model where we include regional and national oil
production and then add a number of interaction terms
representing these factors. Indeed, our results show that
insurgencies are more likely with greater resource extraction, both with respect to nonviolence and with respect to
terrorism. The choice to take up arms for terrorist activities is not affected by resource availability, however.
Access to a share in political power reduces the likelihood of insurgencies. While Hunziker & Cederman
(2012) interpret this result to indicate the importance
of grievances rather than greed, it could also be that
ethnic groups participating in power might be able to
extract a larger share of the resources in their territory,
reducing the chances of greed-based insurgencies. This
20
552
Replication data
The Online appendix, dataset, and do-file for the empirical analyses in this article are available at http://
www.prio.org/jpr/datasets. We used Stata 13 for all
regressions.
Acknowledgements
We thank Dominik Noe for participating in developing
the idea and constructing the database for this article.
We thank Todd Sandler and other participants of the
Terrorism and Policy Conference 2014, as well as the
reviewers and editor of this journal for helpful comments, and Jamie Parsons for proofreading.
Funding
Merle Kreibaum gratefully acknowledges funding by the
German Research Foundation (DFG).
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