Working Paper: NBER ID: w18978
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: resource endowments; geographic location; interstate conflict; oil
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 one or both countries (L71) | Increased likelihood of conflict (D74) |
| Oil located near the border (L71) | Increased likelihood of conflict (D74) |
| One country has oil close to the border (L71) | Significantly higher probability of conflict (D74) |
| Both countries possess oil (L71) | Increased likelihood of conflict with asymmetry of oil field locations (Q34) |
| Geographic asymmetries in resource endowments (R12) | Crucial determinants of territorial conflict (D74) |