Working Paper: CEPR ID: DP17807
Authors: Roland Hodler; Paul Schaudt; Alberto Vesperoni
Abstract: The energy transition increases the demand for minerals from ethnically diverse, conflict-prone developing countries. We study whether and where mining is possible in such countries without raising the risk of civil conflict. We proceed in three steps: First, we propose a theoretical model to predict the occurrence and location of conflict events on the territory of a country based on the spatial distribution of ethnic groups and resource rents. Second, we verify the predictive power of this model using granular spatial data from Sierra Leone and confirm its broader applicability using less granular data from a sample of eight West African countries. Third, we employ our framework to simulate the potential impact of new (planned and unplanned) mining projects in Sierra Leone. A crucial insight is that new mining projects do not necessarily translate into more conflict but may pacify the country under the right conditions and the right policies.
Keywords: civil conflict; ethnic conflict; natural resources; mining
JEL Codes: D74; D82; L72; O13; Q34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| spatial distribution of ethnic groups and resource rents (R23) | occurrence and location of conflict events (D74) |
| higher local resource rents (Q33) | higher local conflict risks (Q34) |
| increased local ethnic diversity among discordant groups (J15) | higher local conflict risks (Q34) |
| new mining projects under right conditions (L72) | pacify the country (H56) |
| planned new gold mines on certain deposits (L72) | increase the country's aggregate propensity to conflict (D74) |
| other deposits (L72) | lower the country's aggregate propensity to conflict (D74) |