DP8620 Do Giant Oilfield Discoveries Fuel Internal Armed Conflicts?

Author(s): Yu-Hsiang Lei, Guy Michaels
Publication Date: October 2011
Keyword(s): Armed Conflict, Civil War, Natural Resources, Petroleum, Resource Curse
JEL(s): O13, Q33, Q34
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8620

We use new data to examine the effects of giant oilfield discoveries around the world since 1946. On average, these discoveries increase per capita oil production and oil exports by up to 50 percent. But these giant oilfield discoveries also have a dark side: they increase the incidence of internal armed conflict by about 5-8 percentage points. This increased incidence of conflict due to giant oilfield discoveries is especially high for countries that had already experienced armed conflicts or coups in the decade prior to discovery.