In this paper we examine the claim that natural resources invite civil conflict, and challenge the main stylized facts in this literature. We find that the conventional measure of resource dependence is endogenous with respect to conflict, and that instrumenting for dependence implies that it is no longer significant in conflict regressions. Instead, it appears that conflict increases dependence on resource extraction (as a default sector). Moreover,resource abundance is associated with a reduced probability of the onset of war. These results are robust to a range of specifications and, considering the conflict channel, we conclude there is no reason to regard resources as a general curse to peace and development.
|Journal||Oxford Economic Papers|
|Publication status||Published - 2009|