Commodity price shocks and civil conflict: Evidence from Colombia

Oeindrila Dube, Juan F. Vargas

Resultado de la investigación: Contribución a RevistaArtículo

206 Citas (Scopus)

Resumen

How do income shocks affect armed conflict? Theory suggests two opposite effects. If labour is used to appropriate resources violently, higher wages may lower conflict by reducing labour supplied to appropriation. This is the opportunity cost effect. Alternatively, a rise in contestable income may increase violence by raising gains from appropriation. This is the rapacity effect. Our article exploits exogenous price shocks in international commodity markets and a rich dataset on civil war in Colombia to assess how different income shocks affect conflict.We examine changes in the price of agricultural goods (which are labour intensive) as well as natural resources (which are not).We focus on Colombia's two largest exports, coffee and oil. We find that a sharp fall in coffee prices during the 1990s lowered wages and increased violence differentially in municipalities cultivating more coffee. This is consistent with the coffee shock inducing an opportunity cost effect. In contrast, a rise in oil prices increased both municipal revenue and violence differentially in the oil region. This is consistent with the oil shock inducing a rapacity effect.We also show that this pattern holds in six other agricultural and natural resource sectors, providing evidence that price shocks affect conflict in different directions depending on the type of the commodity. © The Author 2013. Published by Oxford University Press on behalf of The Review of Economic Studies Limited.
Idioma originalEnglish (US)
Páginas (desde-hasta)1384-1421
Número de páginas38
PublicaciónReview of Economic Studies
DOI
EstadoPublished - oct 1 2013

Huella dactilar

Colombia
Commodity prices
Civil conflict
Coffee
Labor
Income shocks
Opportunity cost
Appropriation
Wages
Oil
Natural resources
Municipalities
Oil shocks
Coffee prices
Armed conflict
Civil war
Revenue
Commodity markets
Oil prices
Resources

Citar esto

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Commodity price shocks and civil conflict: Evidence from Colombia. / Dube, Oeindrila; Vargas, Juan F.

En: Review of Economic Studies, 01.10.2013, p. 1384-1421.

Resultado de la investigación: Contribución a RevistaArtículo

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