The ‘resource curse’ theory argues that states with abundant natural resources see higher rates of conflict and poor economic growth, as people fight to benefit from the resources. This is considered to apply especially to oil rich states; many experts believe that civil war is more likely in these countries. The relationship may not be so simple, however.

Several studies claim to find a link between oil (and other mineral resources) and violent conflict. Research funded by the Crisis States Programme at the London School of Economics in the UK questions the evidence used to support this suggested link.

There are two main supporting arguments for this link. Firstly, high revenues from oil cause greed, which causes civil unrest and riots. The potential wealth from oil is an incentive to seek power and to finance rebellions to gain power. Conflict becomes more likely where benefits are not seen to be distributed fairly. In countries with strong institutions to ensure more equitable distribution, such as trade unions and political parties, conflict is less likely.

The second argument is that states earning major revenues from mineral resources need fewer revenues from domestic tax. This means that political leaders have less need to be accountable to their population. This leaves them vulnerable to attack, again leading to violent conflict.

The research examines the evidence used to show that government legitimacy is undermined by abundant oil:

• There is an argument that oil-rich states have high levels of corruption. However, analysis does not show any clear correlation between corruption rates and states that depend on mineral resources.
• Slow economic growth, as a result of corruption, is also used to demonstrate poor governance in oil rich states. Again, though, evidence shows that overall economic growth is not slower in oil rich states than any others.
• Oil rich states are said to be more often authoritarian and therefore likely to violently attack their opponents. In fact, evidence shows that oil states are no more likely to enter into civil war than democratic states.

The commonly held belief that developing countries are cursed by abundant minerals, especially oil, is not reflected by the evidence. Under scrutiny, the correlation between civil war and the presence of oil is weak. In oil rich states where violent conflict does occur, oil is not necessarily the cause. Many analyses ignore other causes, such as weak government, recent conflict or war in a neighbouring state.

Several factors need greater consideration in policies and conflict analysis in oil-rich countries:

• The causes of conflict should be analysed in more depth; policymakers should not assume oil or minerals are the cause.
• Greater attention to politics, particularly the coalitions supporting state leaders, is needed to assess how mineral rents are used and why challenges to state authority emerge.
• Poor economic performance leads to dissatisfaction and support for violence, so policymakers must better understand how mineral resources affect growth and diversification.
• Wars in a region can easily cross over national borders; this should be recognised when analysing conflicts.
• Conflict is exacerbated by the increasing production and trade of weapons; this aspect of conflict requires greater attention.

Source(s):
‘Oil Abundance and Violent Political Conflict: A Critical Assessment’, Journal of Development Studies, 43:6, pages 961-986, by Jonathan Di John, 2007

Funded by: The Crisis States Programme, a Development Research Centre of the Development Studies Institute at the London School of Economics, funded by the UK Department for International Development

id21 Research Highlight: 13 November 2007

Further Information:
Jonathan Di John
Department of Development Studies
School of Oriental and African Studies
University of London
Thornaugh Street, Russell Square
London, WC1H 0XG
UK

Tel: +44 207 6372388
Fax: +44 207 4363844
Contact the contributor: jd5@soas.ac.uk

School of Oriental and African Studies, UK

Other related links:
'Paying for votes in Sao Tome and Principe'

'Oil and corruption - an experiment in West Africa'

'Overcoming the ‘curse’ of mineral resources in Africa'