1. Are All Resources Cursed? Coffee, Oil and Armed Conflict in Colombia - Oeindrilla Dube & Juan Vargas Grant Gordon, Gov2782

2. The Resource Curse The Resource Curse: “The dependence on natural commodities increases the incidence of civil war” (Collier & Hoeffler 2004)  Rebels use stole rents from export to finance violence  Blood Wheat? “Oil exporters have weaker bureaucratic capabilities, which increases the incidence of civil war” (Fearon 2005)  Petroleum drives the findings for all primary commodities  The Mechanism?

3. Determining The Mechanism Taxes, Strong State & Military Operations Primary Commodity Looting, ExtortionCivil Conflict Lack of State Investment; Weakness

4. The Resource Curse, 2.0 Theoretical Exploration and Parsing:  Factor Intensity of Production Technology  Relative importance of one input (factor) vs. another, compared across industries  Inputs: Capital, Land, Labor  Stolper-Samuelson Theorem  A rise in the relative price of a good increases the return on the factor which is used most intensively in the production of that good and a decrease in all other factors. Thus, the income mechanism (think relatively!): Coffee Price, Income, Opportunity Cost for Rebellion, Violence

5. Are All Resources Cursed Equally? Heterogeneous Resources, Heterogeneous Mechanisms:  Oil & the government revenue mechanism: Oil Price, Gov Revenue, Security Operations, Violence  Substitution Effects into Coca?  What is the mechanism here? “Some resources are cursed, while others are not” - Sometimes substitution doesn’t happen

6. The Coffee Crisis Exogenous Crises Make For Good Studies  1994-1997: Coffee prices increasing  1997-2003: Precipitous drop in coffee prices Identifying assumption: international prices exogenous to Colombian production

7. The Data & The Methods The Data  Panel Data: Municipality and Years  IID assumption? Spatio-Temporal Autocorrelation?  Standard Clustered Errors Difference-in-Difference Estimation  Compare impact post-treatment of treatment group to some control group; subtract out treatment effect  Unit of Analysis: Municipalities  Assumption: “That violence levels would not have changed different in coffee and non-coffee areas in the absence of the coffee price shock”

8. The Findings

9. But What About? Potential Confounders:  Plan Columbia – clashes & casualties  1999 Earthquake – not significant; predation unlikely  Changes in Government Regime – not a driving force Oil  Increase in price leads to an increase in security forces  Capital intensive process  Traditional resource curse revisited

10. The Resource Curse 2.0 “The higher value of this [coffee] commodity in international markets eases social unrest, while a lower value exacerbates politically-motivated violence” Resources vs. Factors of Labor  What is the right way to think of this? Mechanism vs. Decision  Substitution into rebel groups rather than coca?