Diamonds, Rebel’s and Farmer’s Best Friend: Impact of Variation in the Price of a Lootable, Labor-intensive Natural Resource on the Intensity of Violent Conflict

• Date: 01 January 2020
• DOI: 10.1177/0022002719849623
• Published date: 01 January 2020
• Author: Anouk S. Rigterink
• Subject Matter: Articles

Article

Diamonds, Rebel’s and

Farmer’s Best Friend:

Impact of Variation in

the Price of a Lootable,

Labor-intensive Natural

Resource on the Intensity

of Violent Conflict

Anouk S. Rigterink

1,2

Abstract

This article investigates the impact of the world price of a “lootable,” labor-intensive

natural resource on intensity of violent conflict. Results suggest that a price increase

can have opposite effects at different geographical levels of analysis: a decrease in

conflict intensity overall in resource-rich countries, but an increase in conflict

intensity in resource-rich subnational regions. The article argues that intensity of

violence decreases overall due to rising opportunity costs of rebellion but that

violence concentrates in resource-rich areas as returns to looting rise. The article

introduces a new measure of diamond propensity based on geological characteris-

tics, which is arguably exog enous to conflict and can cap ture small-scale labor-

intensive production better than existing measures. The stated effects are found

for secondary diamonds, which are lootable and related to opportunity costs of

fighting, but not for primary diamonds, which are neither.

1

Department of Economics, Oxford Centre for the Analysis of Resource-Rich Economies (OxCarre),

University of Oxford, Oxford, United Kingdom

2

Blavatnik School of Government, University of Oxford, Oxford, United Kingdom

Corresponding Author:

Anouk S. Rigterink, Department of Economics, Oxford Centre for the Analysis of Resource-Rich

Economies (OxCarre), University of Oxford, 5 Manor Rd., Oxford OX1 3UQ, United Kingdom.

Email: anouk.rigterink@economics.ox.ac.uk

Journal of Conflict Resolution

2020, Vol. 64(1) 90-126

ªThe Author(s) 2019

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/0022002719849623

journals.sagepub.com/home/jcr

Keywords

conflict, political economy, resource extraction, civil wars

“The root of the conflict remains diamonds, diam onds and diamonds” a United

Nations representative reputedly said to the Security Council about the civil war

in Sierra Leone (Keen 2005, p 50). If natural resources are thought to contribute to

violent conflict, “lootable” resources such as gems have earned special culprit status

as “rebel’s best friend” (Olsson 2006). These lootable resource are thought to pro-

vide easy access to finance for rebel movements relative to the government because

they occur spread out across a large stretches of territory, can be extracted using

simple methods, and are easily smuggled (Le Billon 2009).

But these resources may also have a differen t face. Many qualitative studies

emphasize that diamonds are a source of livelihoods for artisanal miners and farmers

during the agricultural off season and as such also “farmer’s best friend” (Van

Bockstael and Vlassenroot 2012). Although estimates of the number of artisanal

diamond miners are rough approximations at best, they are large: 500,000 in Sierra

Leone (Maconachie and Binns 2007) over 300,000 in Angola (Dietrich 2000) and

700,000 in the Democratic Republic of Congo (DRC) (Smillie 2005). Artisana l

diamond mining plausibly has linkages to local agriculture and the service economy

(Hilson and Clifford 2010; Maconachie and Binns 2007). Such improved livelihoods

are generally considered to lower conflict risk.

This article investigates lootable, labor-intensive resources, specifically dia-

monds, and finds that these might be both rebel’s and farmer’s “best friend.” These

superficially contradictory effects manifest at different geographical levels of anal-

ysis. The article investigates the impact of variation in the world diamond price on

the intensity of violent conflict in countries and subnational areas in Africa over the

period Q3 2004 to Q2 2015. Results suggest that an increase in diamond price leads

to a decrease in the intensity of violence overall in countries geologically likely to

possess lootable, labor-intensive diamonds but to a concentration of violence in

areas likely to produce them.

Recent works investigating the relationship between natural resources and con-

flict increasingly exploit variation within countries over time (Smits et al. 2016;

Berman et al. 2017; Arezki, Bhattacharyya, and Mamo 2015). This has clear meth-

odological advantages, yet the study of the “biggest culprit” resources has lagged

behind due to a lack of data. Data sets recording the location of mining commonly

only include large mining operations (Berman et al. 2017), and small -scale and

labor-intensive mining is by nature difficult to capture.

Furthermore, different theoretical mechanisms linking natural resources to con-

flict may dominate at different geographical levels of analysis. Three theoretical

mechanisms have received much attention: (1) natural resource revenue constituting

a “prize” for those who overthrow national government or who loot from or extort

Rigterink 91

mining companies, miners, or local government; (2) labor-intensive natural resource

production raising the opportunity costs of conflict; and (3) natural resource revenue

increasing government capacity to resist challengers. Although violence related to

looting of miners is a local phenomenon, increased government capacity or

increased incentives to overthrow government may be felt throughout a country and

so could increasing opportunity costs of conflict if strong spill overs exist.

This article contributes to the existing literature in three ways. First, it investi-

gates the relationship between natural resources and conflict at more than one

geographical level of analysis and illustrates that different theoretical effects may

dominate at different levels. Second, it presents a new measure for the presence of

primary and secondary diamonds that is arguably exogenous to conflict and can

capture potential for small-scale labor-intensive production better than existing data

sets. Third, it investigates the relationship between lootable, labor-intensive

resources and conflict using subnational variation in resource occurrence and varia-

tion in international price over time. This has not been previously done for gems,

despite their strong anecdotal association with violent conflict.

This article focuses on diamonds because they are a microcosm of the three main

mechanisms through which natural resources may be connected to violent conflict.

There exist two types of diamonds, primary and secondary diamonds, which are

chemically identical yet differ in their labor-intensiveness, “lootability,” and poten-

tial for government revenue. Primary diamonds are embedded in their host rock, and

excavating them is a capital-intensive process. Deposits of host rocks are typically

less than a kilometer in diameter and easily defended against looting by companies

or governments. Finally, governments of primary diamond-producing countries

typically capture between 10 percent and 75 percent of the value of prod uction

(Oomes and Vocke 2003). As such, primary diamonds could theoretically be related

to conflict by raising the prize of overthrowing government or by strengthening

government capacity. Secondary diamonds, by contrast, are eroded away from the

host rock by rivers or the sea and can be extracted by digging and sorting gravel, a

labor-intensive process. Secondary diamond fields can stretch out for tens of thou-

sands of square kilometers (Sutherland 1982), and diamonds’ high value-to-weight

ratio makes them easy to smuggle. These characteristics make them lootable or more

likely to provide revenue to rebel movements than to the government (Le Billon

2009). There are extensive reports of rebel movements engaging in secondary dia-

mond mining and smuggling (Le Billon 2009; Keen 2005), whereas government

revenue from secondary diamonds ranges only between 0.8 percent and 3.7 percent

of production value (Oomes and Vocke 2003). Therefore, secondary diamonds could

theoretically be related to conflict by raising the returns to looting or by increasing

the opportunity costs of conflict.

This article outlines the intuition behind a simple theoretical model of lootable,

labor-intensive resources and the intensity of violent conflict. This model predicts

that an increase in the price of a lootable, labor-intensive natural resource may have

different effects at different geographical levels of analysis: a decrease in violence at

92 Journal of Conflict Resolution 64(1)