Working Paper: Conflicts and the New Scramble for African Resources -- A Shift-Share Approach

TL;DR

This paper investigates how increased mineral trade influences conflicts in Africa, finding that trade in oil and fuels raises conflict numbers, while rare minerals impact fatalities without increasing conflicts.

Contribution

It introduces a Shift-Share IV approach to causally estimate mineral trade effects on conflicts using exogenous price shocks in Africa.

Findings

Mineral trade increases conflicts, especially with oil and fuels.

Rare minerals do not increase conflicts but affect fatalities.

Trade impacts vary by mineral type and conflict severity.

Abstract

This paper estimates the causal effect of mineral trade on conflicts in Africa using a Shift-Share IV approach based on an exogenous price-commodity shock. The main result is that an increase in mineral trade significantly increases the number of conflicts while it has no clear effect on fatalities. Exploring heterogeneous effects, I find that a specific group of minerals, oil and fuels, drives the results on the number of conflicts. Moreover, the group of rare minerals such as coltan, precious metals or cobalt has no effect on the number of conflicts but appears to have an important impact on the number of fatalities.