Threats to the stability of nations? Resources, identities and conflict SNF Ambizione project (Kai Gehring)

The literature explaining conflict is still divided in proponents of a “greed” channel (e.g., Collier & Hoeffler, 2004) or “grievances” between ethnic or administrative regions (e.g., Cederman & Girardin, 2007) as the major drivers of conflict. My project emphasizes that both the distribution and profitability of resources (“greed”) and ethnic and regional identities (“grievances”) need to be simultaneously taken into account (relating to, e.g., Alesina et al., 2016; Morelli & Rohner, 2015). I exploit recent improvements in GIS technologies and new datasets to move beyond looking at macro level correlations between resources and political stability, and take the spatial distribution of resources and conflicts properly into account. To measure the direction of causality correctly, I propose identification strategies using exogenous variation. The relationships of interest depend on the type of resource, the political composition of governing coalitions and the underlying strength of national, regional and ethnic identities.

Parts I to III of the project all examine the effect of income shocks for different kinds of resources on political stability. Part IV studies the formation of a common national identity, which is poorly understood so far. More specifically, Part I and II take conflict as an outcome and focus on establishing a causal link between resources and the outcome through quasi-experimental identification strategies, the use of local, geocoded datasets and the collection and processing of our own new data. Part I provides the first comprehensive analysis of the causal effect of development aid at the sub- national and ethnic group level for a large sample of countries. We apply instrumental variable-based identification strategies inspired by Dreher & Lohmann (2015) and Galiani et al. (2016). Part II considers the effect of an illegal and renewable resource on conflict: the attractiveness of growing opium and its relationship with conflict at the district level in Afghanistan. This relates most closely to two papers that study coca cultivation and conflict (Angrist & Kugler, 2008) and distinguish the effect of income shocks for different kind of resources on conflict (Dube & Vargas, 2013) in Colombia. We augment this scarce causal evidence and propose a new identification strategy based on an interaction instrument using shocks to complement drugs to circumvent the obvious problem of the opium price being endogenous to conflict in Afghanistan.

Part III drafts a theoretical model, which embeds the effect of relative resource endowments into a common pool model which is solved by legislative bargaining (building on Persson & Tabellini, 2002). It then combines detailed and partly novel information on oil and mineral discoveries and their extent with information on ethnic groups and their political power status (relating to, for instance, Berman et al., 2017; Caselli & Tesei, 2016). Part IV relates to an emerging literature studying the origins of national identity (Alesina & Reich, 2014; Dell & Querubin, 2016), and exploits a natural experiment that provides exogenous variation within a formerly homogeneous region. More details and the current stage of projects can be found at www.kai-gehring.net.