Diamonds: Rebel's and Farmer's best friend

Jun 2018 | 211


This paper investigates the impact of an increase in the world price of a ‘lootable’, labour-intensive natural resource on the intensity of violent conflict. It suggests that such a price increase can have opposite effects at different geographical levels of analysis: a decrease in conflict intensity at the country level due to rising opportunity costs of rebellion, but an increase in conflict intensity in resource-rich sub-national regions, as returns to looting rise. The paper introduces a new measure of diamond
propensity based on geological characteristics, which is arguably exogenous to conflict and can capture small-scale labour-intensive production better than existing measures. The stated effects are found for secondary diamonds, which are lootable and related to opportunity costs of fighting, but not for primary diamonds, which are neither.

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