Estimating the impact of economic conditions on the likelihood of civil conflict is difficult because of endogeneity and omitted variable bias. We use rainfall variation as an instrumental variable for economic growth in 41 African countries during 1981–99. Growth is strongly negatively related to civil conflict: a negative growth shock of five percentage points increases the likelihood of conflict by one-half the following year. We attempt to rule out other channels through which rainfall may affect conflict. Surprisingly, the impact of growth shocks on conflict is not significantly different in richer, more democratic, or more ethnically diverse countries. I.

Rentier peace or resource curse? The ambiguous effects of oil wealth and oil dependency on violent conflict by

With the great increases in insecurity in Afghanistan and the overwhelming sense that the counter‐insurgency in Afghanistan is not being won, analysts and policymakers are looking for analogies to understand the conflict’s dynamics and devise counter‐measures. One of the analogies that analysts are turning to is the counter‐narcotics and counter‐ insurgency campaign in Colombia. Indeed, there are some striking similarities between the FARC and its relationship to the drug economy in Colombia and the Taliban and its relationship to the drug economy in Afghanistan. However, these similarities do not lie in what many consider the defining characteristic of the FARC, namely the loss of ideology and its transformation into a pure profit‐driven organisation. Rather, from the point of view of counter‐insurgency and the drug‐conflict‐nexus, the ideology‐versus‐greed debate is of far less importance than is frequently believed. Whatever their ideologies and the intensity of their beliefs, both the FARC and the Taliban are deriving not only substantial financial resources from the drug trade, but also substantial political capital. And this political capital is nonetheless greatly enhanced by government policies of eradicating the drug crops, which therefore is counterproductive for counter‐insurgency

This is the third of a series of guest lectures and working papers which the Institute of Financial Economics (IFE) at the American University of Beirut (AUB) has recently decided to circulate as part of its role in making available ongoing research, within and outside the University, related to economic issues of special concern to the developing countries. While financial, monetary and international economic issues form a major part of the Institute’s work, its research interests are not confined to these areas, but extend to include other domains of relevance to the developing world in the form of general analysis or country specific studies Except for minor editorial changes, the lectures are circulated as presented at public lectures organized by the Institute, while working papers reflect on-going research intended to be polished and developed and eventually published. Comments on the working papers, to be addressed directly to the authors, are welcome.

Is there a causal relationship between shocks to natural resources and the intensity of conflict? This question has been subject to an intense debate between those who argue for and against such a causal relationship. The latter group has highlighted the methodological flaws that underpin the claims of the former group, with particular emphasis being laid on the absence of a solid econometric underpinning to the empirical analyses of proponents of such a link. In this paper we attempt to advance this debate by conducting a rigorous econometric analysis of a civil conflict that the Indian Prime Minister has called the single biggest internal security challenge ever faced by his country, the so called Naxal conflict. This conflict is well suited to examining the causal link between natural resource shocks and conflict, because it meets the one of the key conditions under which this link could plausibly hold; a large proportion of the population in the Naxal belt of states is dependent on natural resources for their livelihood. We focus on overtime within-district variation in the intensity of conflict in these states. Using a novel dataset of killings that we created from a thorough survey of the local language press, we find that adverse natural resource shocks have a robust, significant association with the intensity of conflict. A one standard deviation decrease in our measure of natural resources increases killings by 12.5% contemporaneously, 9.7 % after a year and 42.2 % after two years. Our instrumental variables strategy allows us to interpret these findings in a causal manner. The authors would like to especially thank Adnan Farooqui and Sucharita Sengupta who spend several years putting together the Maoist database with remarkable perseverance and fortitude. We are also grateful to Babu Dasri for accessing news sources in Andhra Pradesh and to Zaheeb in Bihar and Jharkhand. 1