Higher national incomes are correlated with political stability. Is this
relationship causal? We test three theories linking income to conflict
with new data on export price shocks. Price shocks have no effect on
new conflict, even large shocks in high-risk nations. Rising prices,
however, weakly lead to shorter, less deadly wars. This evidence
contradicts the theory that rising state revenues incentivize state
capture, but supports the idea that rising revenues improve counterinsurgency capacity and reduce individual incentives to fight in
existing conflicts. Conflict onset and continuation follow different
processes. Ignoring this time dependence generates mistaken
conclusions about income and instability.
Bazzi, Samuel, and Christopher Blattman.
"Economic Shocks and Conflict: Evidence from Commodity Prices."
American Economic Journal: Macroeconomics,
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Conflict; Conflict Resolution; Alliances
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
International Linkages to Development; Role of International Organizations
Global Commodity Markets
Natural Resources and Domestic and International Conflicts