A Deadly Interaction: Assessing the Interplay of Oil and Income

Inequality on the Duration of Civil War

Julian Rosenthal-Erickson and Shom Mazumder

Inspiration

• Economic Roots of Civil Wars and Revolutions in the Contemporary World (Boix 2008)

• The interaction effect of significant export revenues from oil and income inequality is a determinant for the onset of civil war.

• What if we apply this to duration instead?

Background

• Three Broad Theories of Civil Conflict (Collier, Hoeffler, and Soderbom 2004)– Rebellions-as-Investment– Rebellions-as-Business– Rebellions-as-Mistake

• The specifics are still up to debate.

Argument

• Hypothesis– Interaction of oil and income inequality leads to

shorter civil wars. • What is interaction?

• Causal Mechanism– Capital and Liquidity

Empirics (N=435)Duration (dependent)

Coefficient Std. Error P-Value

GDP Per Capita (Lagged)

0.017 0.124 0.900

Log of Population (Lagged)

0.529 0.209 0.011*

Ethnic Fractionalization

0.042 0.834 0.960

Religious Fractionalization

0.941 1.406 0.504

Oil 9.632 4.134 0.020*

Instability -0.936 0.480 0.051(*)

Gini 0.043 0.030 0.154

Interaction of Oil and Gini

-0.223 0.084 0.008**

Constant -4.432 2.803 0.114

Case Studies

• Nigeria– High gini, large revenues from oil– Short war

• Iran– High gini, large revenues from oil– Long war

• Why?

Implication

• Is oil a resource curse?– Depends on how you look at it.

• Future work– Investments in risky areas– Deeper look into interaction of variables

Take Away Points

• Interaction of oil and income inequality is significant and robust given our data– Income inequality’s significance is debatable

• Oil empowers the privileged class• All about your perspective