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Economic & Sector Work :: Mining/Oil and Gas

Oil and Civil Conflict : Can Public Spending Have a Mitigation Effect?

ADEQUATE EDUCATION ADULT LITERACY ARMED CONFLICT ARMED FORCE ARMED FORCES ARMS BASIC HUMAN NEEDS BATTLE CITIZEN CITIZENS CIVIL CONFLICT CIVIL CONFLICTS CIVIL LIBERTIES CIVIL PEACE CIVIL SERVICE CIVIL UNREST CIVIL WAR CIVIL WARS COERCION COLD WAR CONFLICT CONFLICT MANAGEMENT CONFLICT PREVENTION CONFLICT RESEARCH CONFLICT RESOLUTION CONFLICT RISK CONFLICT RISKS CONFLICTS COST OF REBELLION DEATHS DEMOCRACY DEMOCRACY SCORE DEPENDENCE DEVELOPING COUNTRIES DISPUTES DOMESTIC VIOLENCE DURATION OF CONFLICT DURATION OF PEACE ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OPPORTUNITIES ECONOMIC OPPORTUNITY EDUCATIONAL ATTAINMENT ENERGY CONSUMPTION ETHNIC DIVISIONS ETHNIC GROUP ETHNIC HETEROGENEITY ETHNIC POLITICS FERTILITY FIGHTING FOUNDATIONS GENOCIDE GOVERNMENT POWER HEALTH SECTOR HIGH RISK HUMAN CAPITAL HUMAN CAPITAL FORMATION IMF INCOME DISTRIBUTION INCOME PER CAPITA INFANT INFANT MORTALITY INTERNAL CONFLICT INTERNATIONAL ORGANIZATION INTERNATIONAL SECURITY INTERNATIONAL STUDIES INTERNATIONAL WAR INTERPERSONAL SKILLS INVESTMENT IN EDUCATION JOURNAL OF CONFLICT RESOLUTION LACK OF DEMOCRACY LEVEL OF POVERTY LIMITED RESOURCES LINGUISTIC FRACTIONALIZATION LITERACY RATES LIVING STANDARDS MATERIAL RESOURCES MILITARIZATION MILITARY BUDGETS MILITARY EXPENDITURE MILITARY EXPENDITURES MILITARY FORCES MILITARY OPPOSITION MILITARY PERSONNEL MILITARY REGIMES MILITARY SPENDING NATIONAL DEFENSE NATIONALISM NATIONS NATURAL GAS NATURAL RESOURCE NATURAL RESOURCES OBSERVER OPPORTUNITY COST PEACE PEACE RESEARCH PENSIONS PERSONAL ENRICHMENT POLICE POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL CHANGE POLITICAL INSTABILITY POLITICAL LEADERSHIP POLITICAL OPPOSITION POLITICAL PARTICIPATION POLITICAL PROCESS POLITICAL RIGHTS POLITICAL STABILITY POLITICAL SUPPORT POLITICAL VIOLENCE POPULATION SIZE POPULOUS COUNTRIES POST-CONFLICT PUBLIC SERVICE PUBLIC SERVICES QUALITY OF LIFE REBEL REBEL GROUP REBEL GROUPS REBELLION REBELS RELIGIOUS FRACTIONALIZATION RESOURCE MOBILIZATION REVOLUTIONS RISK OF CONFLICT RURAL AREAS SAFETY NETS SANITATION SECONDARY EDUCATION SECURITY FORCES SERVICE DELIVERY SOCIAL COHESION SOCIAL EXPENDITURES SOCIAL MOBILITY SOCIAL POLICIES SOCIAL SECTORS SOCIAL SECURITY SOCIAL WELFARE STATE UNIVERSITY TERRORISM TOLERANCE UNEMPLOYMENT VICTIMS VIOLENT CONFLICT VIOLENT CONFLICTS VIOLENT MEANS WAR DURATION WAR ECONOMY WAR PROJECT WARFARE WORLD DEVELOPMENT YOUNG MALE YOUNG PEOPLE YOUNG SOLDIERS
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World Bank, Washington, DC
Africa
2014-09-12T20:53:35Z | 2014-09-12T20:53:35Z | 2014

In this paper, the conditions under which the spending patterns of oil resources may mitigate the risk of violent domestic conflict are studied. Some recent research suggests that more government spending either in general or specifically in welfare and military may reduce the risk of civil conflict onset (Hegre and Sambanis, 2006; Basedau and Lay, 2009; Fjelde and de Soysa, 2009; Taydas and Peksen, 2012). While oil wealth has begun to be considered in the study of civil conflict as an important source of revenue for governments, there has not been a systematic analysis of whether oil-rich countries can increase public spending or alter the particular allocation of such spending to social sectors or the military as a way to mitigate the risk of conflict. We use time-series cross section data (148 countries, 1960-2009) to test the hypothesis that oil has a conditional effect on civil conflict depending on the size of government expenditure and the allocation of government spending. Our dependent variable is the onset of small and large civil conflict (Gleditch et al., 2002). The empirical estimations show that small and large conflicts alike are less likely when large parts of oil resources are dedicated to military spending. Increased spending in education, health or social security is associated with lower risk of small-scale conflict, irrespective of the level of oil revenue. On the other hand, higher levels of general government expenditure do not appear to have any robust mitigating effects. The paper proceeds as follows: Section II reviews work on natural resources and conflict; Section III discusses the literature on public spending and conflict; Section IV presents our approach, derives testable hypotheses, and presents the data; Section V describes the results; and Section VI concludes.

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