Conflict and Coffee: Are Higher Coffee Prices Fuelling Rebellion in Uganda?

Abstract

The relationship between income and conflict has been a topic of great interest in the political economy literature. A growing body of research has utilised within-country variation in conflict to address the concerns raised about the cross-country level studies on income and conflict. This study adds to this literature by examining the relationship between coffee prices and conflict across fifty-six districts within Uganda over the 2002-2014 time period. Using a difference-in-difference framework, we find that increases in global coffee prices lead to a higher likelihood of conflict in coffee growing districts. Higher coffee prices may relax credit constraints faced by rebel groups allowing them to finance armed conflicts. In addition, we find that higher coffee prices also lead to greater intensity in conflict as measured by both the number of conflicts and fatalities.