Working Paper: CEPR ID: DP9440
Authors: Francesco Caselli; Massimo Morelli; Dominic Rohner
Abstract: We establish a theoretical as well as empirical framework to assess the role of resource endowments and their geographic location for inter-State conflict. The main predictions of the theory are that conflict tends to be more likely when at least one country has natural resources; when the resources in the resource-endowed country are closer to the border; and, in the case where both countries have natural resources, when the resources are located asymmetrically vis-a-vis the border. We test these predictions on a novel dataset featuring oilfield distances from bilateral borders. The empirical analysis shows that the presence and location of oil are significant and quantitatively important predictors of inter-State conflicts after WW2.
Keywords: natural resources; oil; war
JEL Codes: Q34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Presence of oil in at least one country of a pair (Q37) | Increases likelihood of conflict (D74) |
| Proximity of oil to borders (L71) | Increases likelihood of conflict (D74) |
| Asymmetry of oil locations relative to the border (L71) | Influences likelihood of conflict (D74) |