In this paper, the conditions underwhich the spending patterns of oil resources may mitigatethe risk of violent domestic conflict are studied. Somerecent research suggests that more government spendingeither in general or specifically in welfare and militarymay reduce the risk of civil conflict onset (Hegre andSambanis, 2006; Basedau and Lay, 2009; Fjelde and de Soysa,2009; Taydas and Peksen, 2012). While oil wealth has begunto be considered in the study of civil conflict as animportant source of revenue for governments, there has notbeen a systematic analysis of whether oil-rich countries canincrease public spending or alter the particular allocationof such spending to social sectors or the military as a wayto mitigate the risk of conflict.We use time-series crosssection data (148 countries, 1960-2009) to test thehypothesis that oil has a conditional effect on civilconflict depending on the size of government expenditure andthe allocation of government spending. Our dependentvariable is the onset of small and large civil conflict(Gleditch et al., 2002). The empirical estimations show thatsmall and large conflicts alike are less likely when largeparts of oil resources are dedicated to military spending.Increased spending in education, health or social securityis 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 notappear to have any robust mitigating effects.The paperproceeds as follows: Section II reviews work on naturalresources and conflict; Section III discusses the literatureon public spending and conflict; Section IV presents ourapproach, derives testable hypotheses, and presents thedata; Section V describes the results; and Section VI concludes.
PDF
download
878987797
028-85220240
