resource conflicts, wealth sharing and … resource conflicts, wealth sharing and postconflict peace...
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Resource Conflicts, Wealth Sharing
and Postconflict Peace 1 June 2009
Helga Malmin Binningsbøa, b & Siri Aas Rustada, b aDepartment of Sociology and Political Science (Norwegian University of Science and
Technology) bCentre for the Study of Civil War (International Peace Research Institute, Oslo)
Abstract A multitude of research shows that natural resources are associated with internal armed conflict. The direct link between resource wealth and internal armed conflict is often explained through a ‘greed’ mechanism, rebels fight to gain control over resource revenues and use resources to finance their rebellion. Further, we also see disputes over resource revenue distribution, both related to high value resources and land. However, very little research has looked at how conflict resources affect the post-conflict period. In this paper we look into this, as well has looking at some of the remedies that have been used to mitigate natural resource conflicts. We find that natural resource driven conflicts, particularly where resources have been used to finance the rebels, have a higher likelihood of falling back into conflict in the short run than other conflicts. However, we do not find any statistical evidence that short term wealth sharing arrangements ease the peace process in natural resource conflicts. On the other hand case studies show that wealth sharing, if carefully implemented, does help. As a conclusion we therefore offer an evaluation of what problems a wealth sharing could encounter and which pitfalls the policy makers need to be aware of.
Paper prepared for presentation at the CSCW Working Group 3 workshop 11-12 June 2009.
WORK UNDER REVISION, PARTLY IN PROGRESS!
Comments welcome! Please don’t cite! Earlier versions of the paper were presented at the 15th Annual National Political Science Conference, Trondheim, Norway, 3–5 January 2007, the 48th Annual Convention of the International Studies Association, Chicago, IL, 28 February – 3 March 2007, 6th Pan-European Conference on International Relations, Turin, Italy, 12 − 15 September 2007 and at the International Peace Research Institute, Oslo (PRIO), Norway, 3 September 2008. We thank participants at these conferences, in particular Ingrid Samset, for helpful comments and suggestions.
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Introduction Where resource exploitation has driven war, or served to impede peace, improving governance capacity to control natural resources is a critical element of peacebuilding.1
Carolyn McAskie, Assistant Secretary-General for Peacebuilding Support in the UN,
Carolyn McAskie emphasizes the core of what we argue in this paper. Here we assert
that resource conflicts are more difficult to solve than conflicts unaffected by natural resources,
and explore whether wealth sharing can mitigate these difficulties. We test this by looking at the
likelihood of peace failure in postconflict societies.
For several years peace and conflict research has focused on the role of natural resources
in conflict. This research shows for example that oil and surface diamonds increase the risk of
conflict outbreak and prolong civil war (Fearon & Laitin 2003; Lujala, Gleditsch & Gilmore 2005;
Lujala 2008; Ross 2004). It is also argued that environmental pressure and resource scarcity
escalate violence and affect both national and international security (Homer-Dixon, 1999;
Kaplan, 1994) However; there is surprisingly less research on the consequences of these linkages
on peace processes and the sustainability of peace. In this paper we are hoping to contribute to
this gap in the literature.
To be able to achieve a stable peace all important components of conflict must be
addressed in the peace process; our focus is particularly on the resource component. A wealth
sharing provision can be compared to power sharing, and share some of the same features.
Through power sharing conflict parties get access to state power and participate in decision
making processes. This access is often what the opposition aimed for in the first place. Wealth
sharing is a similar arrangement, but the pie to share is natural resources (wealth), not decision
making power.
However, it is important that the mechanisms chosen to deal with this are able to stop the
violence in the short run, in order to create an environment for a stable civil peace in the long
run. We therefore focus on the role of immediate postconflict natural resource management
strategies, and how they influence civil war recurrence. We argue that it is important to look
specifically on what is done in the short run, just after the armed conflict ended, because this is
when the environment for lasting peace is built. If the parties fail to deal with the calamitous
relationship between natural resources and civil war in the short run, the risk of recurrence within
few years might increase.
1 http://park.itc.u-tokyo.ac.jp/nakayama/pcnrm/PCNRM-Geneva-Report.pdf (downloaded 28 September 2008)
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This paper offers four contributions to the resources and conflict literature; we present
detailed and theory-driven classification of resource conflicts and wealth sharing, as well as new
data on the presence of resource conflicts and wealth sharing in all internal armed conflicts since
the Second World War.
Contrary to many other papers looking into natural resources we do not focus on types of
resources, but rather the role that the resource played in the conflict. We identify three types of
natural resource conflicts; those were resources were used as financial source for the rebels, those
related to resource distribution and in those cases where other aspects of resources affected the
courses of the conflict.
The term wealth sharing is frequently used when describing post-conflict natural resource
management schemes. However, wealth sharing covers a large variety of different arrangements.
In this paper we try to entangle this term and have disaggregated it into three more specific
categories, wealth redistribution, resource portfolio allocation and land reform. The importance
of doing this is that all these categories answers to different demands from rebels and opposition
groups, but they also encounter different problems.
In the first part of the paper we look into the relationship between natural resource
driven conflict and lasting peace. Early in the paper we test relationship between resource driven
conflicts and post-conflict peace duration. We find that peace periods following resource conflict
have a higher likelihood of failing, i.e. falling back into conflict. This particularly true for conflicts
where rebels are financed by natural resources.
To further investigate this we look at what types of remedies that could be put in place to
ease the peace process in resource conflict. However, we do not find any evidence that wealth
sharing arrangements so far have produced the desired results. In the conclusion we offer some
explanations as why we do not find that wealth sharing contribute to prolong peace periods.
Natural Resources, Conflict and Peace The Maoist insurgents’ fight for land reform in Nepal, the rebels’ quest for greater control over
the resource rich Bougainville region in Papua New Guinea, and the diamond-fuelled civil war in
Liberia provide examples that have inspired several scholars to investigate the link between
conflict and natural resources (see for example: Collier & Hoeffler 2004, Fearon & Laitin 2003,
Fearon 2005, Le Billon 2001, Ross 2004). This literature maintains that natural resources can
become part of the war economy as a financial resource both for the rebel organization and the
government, and thus affect the conflict. It is also argued that natural resources can contribute to
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conflict through bad governance. According to Sachs & Warner (1995) poor economic
performance is associated with natural resource abundance through slow growth and poverty.
Another theory links natural resources to grievances in areas where resource extraction takes
place. The population in resource rich areas might feel they only experience the disadvantages of
extraction, like pollution, while they are not getting what they consider a fair share of the resource
revenues. However, resource related grievance does not only occur in areas with high value
resources. In many countries conflict relates to questions of fair distribution of scarce and
necessary resources such as land and water.
The debate on natural resource and conflict does not only point in one direction. Several
scholars have raised critique towards Collier & Hoeffler (2004), which was one of the first to
point out the relationship between natural resource and conflict, for using primary commodity
export ratio as an indicator of natural resources (De Soysa 2002). However, recent research has
shown that by disaggregating resource type, research finds support for some of the hypotheses
within the resource curse literature. Fearon & Laitin (2003) find that particularly oil increases the
likelihood of conflict, Lujala, Gleditsch & Gilmore (2005) find that secondary diamonds (surface
diamonds) have some effect on ethnic conflicts. Lujala (2008) also finds that rebel access to
resources (oil and gemstones) doubles the conflict duration. Further, Alesina & Rodrik (1994)
find that inequality in land ownership and income is negatively correlated with subsequent
economic growth
Given the empirical support of the resource curse hypotheses, it seems likely to believe
that natural resources also play a prominent role in postconflict settings and influence the risks of
recurring conflict. If the problems related to resources are not dealt with properly the risk of
having a relapse into conflict could be greater in resource conflict compared to non-resource
conflicts. However, natural resources can play different roles in different conflict. Further, the
same type of resource could have different role or several roles. For example oil can in some
cases be subject to disagreement over distribution of revenues, in other cases it could be used as
conflict finance. We therefore find it useful to categorize resource conflict based on the resource
mechanisms at work, rather than type of resource. Further, ‘wealth’ in the Aceh, Sierra Leone and
Sudan cases is mainly understood as revenues from high-value resource exploitation, in particular
resources such as oil, gas, minerals and diamonds. We think it is wise to expand this
understanding of wealth to include the right of land, and thus indirectly agricultural resources.
Many insurgents, such as the Maoist in Nepal, justify their fighting and attract supporters by
attacking unfair distribution of resource revenues and resource ownership, and promised for
example land reform to achieve more equal distribution. We also see examples where agricultural
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resources have been used to finance rebel groups, for example the MFDC rebels in Casamance in
Senegal use cashew nuts to finance their uprising.2
First, conflicts can be related to distribution of resources. These include both high-value
resource conflicts such as regarding oil in Nigeria, and conflicts over land ownership, such as in
Nepal. These types of conflicts often include an element of horizontal inequality, i.e. where one
group (ethnic, religious, geographical ect.) is getting a larger share of the resources than others
(Østby 2009). Or, there is a perceived horizontal inequality, where some groups think that others
are receiving more than them. Such disagreements over distribution of resources are also likely to
entail challenges in terms of postconflict stability. Ignoring this (perceived) uneven and unfair
distribution may lead to reigniting the conflict. Second, we include conflicts where resources
financed the conflict. This could typically be diamonds or other high-value resources; however we
also have examples where agricultural products/resources financed the rebellion.3 Most armed
conflicts take place in poor countries, access to resource revenue thus constitute a significant
economic asset for rebels. Letting go of such benefits does not come easy, and unless the
termination of armed conflict includes considerable compensation and future prospects for rebels
it is likely they rearm.
The last category includes conflicts where resources were not directly involved, but where
resources clearly influenced and intensified the course of the conflict. Proximity to (potential and real)
pipelines, knowledge of resource reserves, disagreements over resource revenues are examples of
situations which can trigger or intensify armed conflict. Although not playing such a direct role as
financing or being an important stake, such issues can contribute to distort peacebuilding4.
In this paper we are interested in both how natural resources affect the recurrence of civil
war, as well as the possible remedies for solving natural resource conflicts. Because of findings in
the resource curse literature we expect that Resource related conflicts are more likely to resume
than conflicts unaffected by natural resources. To test the effect of natural resources on the
reoccurrence of war we coded a dummy variable indicating whether natural resources played a
role during conflict. The resource conflicts have further been coded according to the role
2 (http://www.irinnews.org/Report.aspx?ReportId=41947 060303 (270808)) 3 Note that this category only refers to conflicts where the opposition group used resources to finance rebellion. We assume that resource revenues are a part of the national economy, therefore by default these governments use resource revenues to finance the army and counter-insurgency strategies. 4 Among the natural resources we consider affecting conflict we include resources such as oil, gas, diamonds, minerals, forest, land and agricultural products. However, we have not included drugs and narcotics as resources, because they are illegal, hence they should not be included in any wealth sharing arrangements.
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resources played in the different conflicts5. We use cox survival analysis to run these test; the
method is further described in the Data and Method section later in the paper.
Resource conflicts and peace periods In figure 1 we have estimated a Kaplan-Meier survival estimate which indicates the share
of peace periods that have survived at least until the given time of analysis. In the first year there
seems to be little difference between resource conflicts and non-resource conflicts. However,
passing approximately 500 days into the peace period the likelihood of peace failure in a post-
resource conflict setting (i.e. a new conflict breaks out) is much greater than after non-resource
conflicts.
To further explore this relationship we ran a Cox proportional hazard regression where we look
at the three different types of resource conflicts that we have described previously.6 From Model
1 in Table 1 we see that conflicts where natural resources was used as means of finance by the
5 Coding of the conflicts relied on Keesing’s Record of World Events, case studies and other studies on natural resources and conflict, such as Le Billon (2001, 2005) and Ross (2003). In addition the online UCDP/ database and the US Library of Congress Country Studies were used extensively. Other sources were: Global Security and Armed Conflicts National Military History Index, as well as Wikipedia and even some plain Google searches. 6 See Method and Data section later in the paper for operationalization of variables.
0.00
0.25
0.50
0.75
1.00
0 1000 2000 3000 4000 5000analysis time
No resources Resource-affected conflicts
Kaplan-Meier survival estimates
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rebels are more likely to recur. This is significant at a 0.05 level. Violent disagreements over
distribution of natural resources also seem to have higher risks of falling back into conflict,
however this is not significant. The last category, where natural resources affect conflicts in less
specific ways than finance and distribution, actually has the opposite effect on peace failure;
however, this coefficient is far from significant. In Model 2 these results hold when we only look
at peace periods following more severe conflicts (with a battle death threshold of 100 instead of
25). In fact the resource financed conflict variable actually becomes significant at a 0.01 level in
Model 2.
Table 1 (1) (2) VARIABLES _t _t
All conflicts Conflict with Battle
Death > 100 Finance 0.964** 1.172*** (0.0217) (0.00713) Distribution 0.314 0.310 (0.322) (0.338) Intensify ‐0.220 ‐0.151 (0.382) (0.593) Lnbtldead ‐0.114*** ‐0.128** (0.00871) (0.0479) Victory ‐0.852*** ‐1.039*** (0.000128) (7.74e‐05) Lnpop 0.146*** 0.105 (0.00521) (0.109) sip2noneg ‐0.386 ‐0.326 (0.160) (0.349) lnKSGgdppc ‐0.238** ‐0.0317 (0.0140) (0.799) Observations 2354 1826 R‐squared . .
Robust p values in parentheses *** p<0.01, ** p<0.05, * p<0.1
In figure 2 we separate the two types of resource conflicts that have negative effects on
postconflict peace duration and compare them to non-resource conflicts (resource intensifying
conflicts are excluded from the sample) . Peace periods following resource finance and resource
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distribution conflicts have lower chances of survival (i.e. higher likelihood of relapsing) than
peace periods following non-resource conflicts. However, we do not see a major difference
between finance and distribution.
These results suggest that natural resources play an important role not only in conflicts
but also in the post-conflict period. This further suggests that issues related to natural resources
are important to address in negotiations and peace processes. In the following sections we will
look closer into wealth sharing as a tool to address post-conflict resource management.
0.00
0.25
0.50
0.75
1.00
0 1000 2000 3000 4000 5000analysis time
No resources FinancingDistribution
Kaplan-Meier survival estimates
Wealth Sharing as a Postconflict Resource Management Tool
Despite the clear link between natural resources driven conflicts and likelihood of falling back
into conflict that we found in the previous section, there are very few studies on the effect of
post-war resource management. Le Billion and Nicholls (2007) compare 26 conflicts after the
Cold War and find that revenue sharing and economic sanctions have a stronger correlation with
durable peace than resource-aiming military interventions. There are also a few examples of
scholars discussing different strategies on how to deal with resource revenues after conflict (see
for example: Ross 2002, Ballentine & Nitzschke 2005). This literature focuses on for example
the international community’s responsibility to increase market access for primary commodity
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exporters, stabilization funds, natural resource funds, and reduce rebels’ access to international
resource markets, such as the Kimberly process. Weinthal & Luong (2006) suggest that private
domestic ownership could be a remedy for the resource curse. They argue that ‘By taking
resource rents out of the state’s direct control, domestic privatization simultaneously fosters the
conditions under which governments have an incentive to build strong fiscal and regulatory
institutions and creates a new set of societal actors with the potential to demand these
institutions.’ (p. 46). This could be a very useful strategy in a postconflict society, where the state
might have been weakened by the conflict and other actors are needed to help rebuild the
economy.
However, a problem with these strategies, such as a stabilizing fund or natural resource
funds, is first of all they need time to develop, and works best in a democratic context, second;
they do not give instant relief by addressing the underlying causes of conflict right away. Some of
the strategies, such as imposing trade barriers, are reliant on international cooperation which
might not be in place or even possible at the time of the peace process.
In the long run the resource management strategies mentioned address both what might
have been the cause of the conflict, such as poverty, and also issues on how the war was fought,
by limiting the financing sources for the rebels through strategies like the Kimberly process. Most
of these strategies would be very helpful and necessary to achieve a long term stable peace, but
are too slow and difficult to implement immediately after war. In addition, they do not address
particularly challenges related to peace negotiations, how to satisfy belligerents and other relevant
parties, and how to address the resource component in the short run.
In this paper we therefore focus on a set of management strategies that directly address
the problematic relationship between resources and conflict shortly after termination, namely
different ways of sharing wealth. Wealth sharing can in the short run satisfy the parties at the
negotiation table by accommodating demands right away and in a longer time frame remove
incentives to fight and thus create a stable peace, and space for other resource management
strategies to be developed.
Wealth Sharing
Existing research on postconflict resource management as well as actual peace agreements are
not consistent in the concepts and definitions of wealth sharing they use. Le Billon & Nicholls
(2007) uses ‘revenue sharing’ in their study of instruments to end resource wars. They look at
resource revenues only, thus omitting resources where income is indirect (i.e. include revenues
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from diamond extraction, but not revenues from agricultural produce). In the Lomé agreement in
Sierra Leone, although emphasizing that ‘the proceeds from the transactions of gold and
diamonds shall be public monies’ and ‘[P]riority spending shall go to rural areas’ (Lomé
agreement, 1999: Article VII, 6), the most important wealth sharing mechanism was the decision
to make the leader of the RUF rebels, Foday Sankoh, the chairman of the Commission governing
the country’s resources. Further, the framework agreement on oil resources in the Sudan
(Naivasha agreement, 2004) is titled a ‘wealth sharing’ agreement, which includes several types of
wealth sharing. We use wealth sharing as a collective term for post conflict mechanisms that
specifically deal with broadening the decision-making power over natural resources, especially
through including rebel groups and rebellious regions.
Attempts at terminating conflict that do not pay proper attention to inequalities and
allocation of what is considered public money might see conflict reigniting. However, in societies
where natural resources have influenced the conflicts and especially where the resources have
been a major income for the rebels, belligerents would most likely not agree on an arrangement
where they will be worse off than during the conflict (Ballentine, 2005, p.459). Further, in
regions of extreme poverty, rebel groups often build popular support for armed conflict with
promises to alleviate poverty through the future sharing of resource gains that they hope to win
control or exert influence over. This creates an expectation to the rebels or opposition to fulfill
their promises at the negotiation table. Therefore a wealth sharing scheme often has to be a
compromise with what is needed to end the war, and what is needed to build a stable postconflict
economy and in the long run a stable democracy. There is often a big and irreconcilable gap
between the expectations and demands from the parties around the negotiation table and the
peace requirements. Therefore, the concessions (peace requirements) one must give up can
sometime hinder long term civil peace. The way the wealth sharing is set up is therefore
important in whether it will contribute to a sustainable peace or not.
Wealth sharing resembles power sharing, both in name and content. Jarstad defines
power sharing as ‘a political pact between contending parties which formally outlines how power
is to be shared in the legislative and /or executive branch of future governments’ (Jarstad 2008
chapter 4, p 111). Although wealth sharing mechanisms are not necessarily pacts agreed to by
contending parties, we consider wealth sharing arrangements to be in line with Jarstad’s definition
of power sharing. In our data we include only natural resource management mechanisms that are
specific policies applied to mitigate resource-related grievances and aimed at reducing tensions
and violence.
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Sharing of wealth can refer to different mechanisms depending on the type of resources
and wealth, and the particular context in which the conflict takes place. We have separated
postconflict wealth sharing schemes into three different categories: wealth redistribution, resource
portfolio allocation and land reform.
Wealth redistribution
The inherent idea of wealth redistribution is that wealth and resource revenues should be
distributed among the people in a country. By emphasizing wealth re-distribution we emphasize
that wealth should be distributed or managed in a different way post-conflict, than before or
during conflict. In resource conflicts there might have been grievances before the conflict started
related to unfair distribution of revenues, or during the war the distribution of resource wealth
has been altered and rebels might have taken control over them. Redistribution of wealth implies
that someone else owns or claims the resource revenues, and that their current control over these
will change. Although redistribution of wealth is implemented to achieve peace, there is also a
risk that it increases the likelihood of postconflict violence.
Redistribution of wealth has become an important tool to reduce poverty and inequality.
For example in the Sudan peace agreement (Naivasha agreement, 2004; Comprehensive Peace
agreement, 2005) a whole document is devoted to this. The Sudan Agreement on Wealth Sharing
During the Pre-Interim and Interim Period7 states:
The sharing and allocation of wealth emanating from the resources of the Sudan shall ensure that the quality of life, dignity and living conditions of all the citizens are promoted without discrimination on grounds of gender, race, religion, political affiliation, ethnicity, language, or region. The sharing and allocation of this wealth shall be based on the premise that all parts of Sudan are entitled to development (Naivasha agreement, 2004: Article 1.4).
However, in reality this type of equality is not so easy to achieve at the negotiation table.
Also the perception of what different groups and areas have the right to receive and claim of the
resource wealth can be different amongst the negotiating parties.
Wealth can be distributed in several different ways depending on the aim and the context
in which the wealth sharing arrangement is created. First of all it can be an equal (symmetric)
distribution between regions in a country. However, this can be problematic if the resources are
extracted in one or a few specific regions, which have to bear the cost for the extraction with
little or no compensation.
7 http://www.usip.org/library/pa/sudan/wealth_sharing_01072004.pdf (30. May 2008)
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Most territorial wealth sharing arrangements are related to armed uprisings in parts of
countries that demand more autonomy and control over what they see as their own resources.
For governments in such countries it is an option to distribute a larger part of the resource share
to this part of the country to keep them within the state boundaries, such as in the example of
Aceh.
The separatist conflict in Aceh in Indonesia, between the Free Aceh Movement (GAM)
and the Indonesian central government, started in 1976. One of the main issues was that people
in the region felt they were not awarded enough income from the resources extracted in the Aceh
districts. During the Suharto New Order regime most of the revenues were collected centrally
and distributed equally to both producing and non-producing districts, as well as a large sum for
the central government. After the fall of Suharto in 1998 a new decentralization policy was
implemented, and in the 2005 peace agreement Aceh was rewarded 70% of the resource rents
produced in the region. The Aceh region got full control over these resource rents as well as a
large degree of autonomy. This seems at the date of writing to be a successful peace and wealth
redistribution arrangement (Aceh, 2005, Aspinall 2007, Aceh Public Expenditure Analysis
Report, World Bank8). A similar solution has been implemented in Angola, to comply with the
Cabinda region’s demand for a greater share of oil revenues. Nonetheless, Nigeria serves as an
example where this type of arrangement is applied but still the population in the oil rich Niger
Delta feel they are not getting enough. One of the claims from the militant groups in the region is
to secure resource control to the oil producing regions. In this case it is clear that there is a gap
between what the oil producing regions thing is a legitimate claim, and what the Federal
Government think is a reasonable claim (Rustad, 2009).
Redistribution of wealth can potentially create horizontal inequality both in absolute
terms and as a perception among the population. Some regions might become better off, or other
groups might believe that these regions are better off, and create a perception of regional
inequality. Østby (2008) finds that horizontal inequality may increase the likelihood of conflict.
This indicates that if the wealth redistribution arrangement does not take this into account, or the
government is not able to execute the strategies satisfactory, a wealth sharing arrangement might
actually lead a country back into war.
Resource portfolio allocation
A different strategy can be to redistribute central decision making power over resources, such as
a specific minister position, among the participants at peace negotiations; we define this
8 http://www.decentralizationindonesia.org/apea-report.html (04 June 2008)
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mechanism as resource portfolio allocation. This is different from wealth redistribution in that it
gives the control over resources to certain groups, for example a rebel group, and not necessarily
to a certain regions. It is also a more centralized form of wealth sharing; while wealth redistribution
is accommodating regions by decentralizing resource revenues, resource portfolio is allocating
power centrally (on the elite level). In addition, whereas postconflict wealth redistribution refers
directly to economic issues (resource income), resource portfolio considers power over resources
in a broader manner. Redistribution of wealth’s (alleged) aim is to reduce poverty and perception
of horizontal inequality, while resource portfolio accommodates potential spoilers by allocating
decision making powers to them. This might give the respect and recognition that the group is
craving, and hence met their demands. On the down side it might at the same time create a better
opportunity to exploit the resources for those in control.
The Sierra Leone peace agreement from 1999 exemplifies this. The RUF leader, Foday
Sankoh, was given the chairmanship of the Commission for Strategic Resources, which in reality
meant de facto control over diamond extraction and income.9 Diamond smuggling was a crucial
source of income for the RUF during the conflict and with this concession in the peace
agreement they could keep the control even after the war.
Resource portfolio might be a more hazardous strategy than redistribution of wealth, by
giving rebels and potentially spoilers access to power. But in many cases it is the only thing that
can lead to a desired and necessary ceasefire. A tool to lower the risk of a resource portfolio
arrangement is to set a ‘sunset clause’, an end date, to the arrangement. For example the position
is only available for the rebel group until the next election, and then the group has to be reelected
to be able to continue. This was the case in Sierra Leone, where the arrangements prescribed in
the 1999 Lomé agreement should last only until the elections in 2001 (postponed till 2002). The
RUF were not able to rally enough support and disappeared out of politics after the May 2002
elections.
Resource portfolio schemes can lead to troubles associated with inclusion and exclusion
(Jarstad, 2008). If not all relevant groups are included in negotiations and postconflict
arrangements, those excluded might use the resource portfolio as an incentive to continue or
wage war. Le Billon & Nicholls argues that buying peace through wealth sharing ‘could be
perceived as rewarding violence’ (2007: 618), hence wealth sharing becomes a reward other
actors would like to receive.
Land reform 9 The complete title of the body Sankoh chaired is the Commission for the Management of Strategic Resources, National Reconstruction and Development (CMRRD) (Lomé Agreement, 1999: Article VII).
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Both redistribution of wealth and resource portfolio allocation are often linked to situations
where wealth refers to high value resources such as oil and diamonds.10 However, wealth sharing
arrangements can also deal with scarce resources, and especially ownership of land. Many
conflicts are directly linked to contestation over land. In Rwanda in the 1980s there were political,
economic and social grievances related to land scarcity, as a result of overpopulation and
inequitable distribution of land. This further led to a deepening of rural poverty in the country,
and later it became an important factor in the violent conflict in the region (Bigagaza, Abong &
Mukarubuga 2002). In 1993 the Arusha peace process was concluded, however the only issues
concerning land redistribution that was mentioned was in regard of return of refugees:
The right to property is a fundamental right for all the people of Rwanda. All refugees shall therefore have the right to repossess their property on return (Arusha Agreement, 1993: Annex V, Article 4).
The wording is fairly vague and there is no strategy how this should be done. Further,
there is no mention of other types of land redistribution. The 1993 Arusha Agreement failed and
the Rwandan genocide took place just few months after the peace deal was signed. Bigagaza,
Abong & Mukarubuga (2002: 60) argue that one of the reasons why the Arusha Agreement failed
was that the negotiators were preoccupied with issues of power sharing, ethnic composition and
the composition of armed forces, while overlooking unequal land ownership, decreasing
international value of agricultural commodities and deepening rural poverty. This is a prime
example of how unsatisfactory resource management can lead to reoccurrence of conflict.
Land issues can also be relevant in peace processes where the government (or head of
state) has owned large parts of the land. In the ongoing peace process in Nepal the distribution of
the King’s land will become an important issue (Fieldwork by Jason Miklian April 2008).
Expectations
Based on the findings that we found in the first part of this paper, we want to look into the
remedies that could ease the peace process following resource driven conflicts. We have
described different wealth sharing strategies – redistribution of wealth, resource portfolio
allocation, and land reform – how they can work and which pitfalls that might occur. Based on
these elaborations we assume that in conflicts where natural resources have played a role, the
likelihood of reoccurrence of conflict will be less if there has been initiated some kind of wealth
10 We acknowledge that abundance can be a misleading word, given that a precious ’abundant’ resource is only precious because it is globally, or even within the relevant country, scarce. However, in conventional use ‘abundant resources’ refers to oil, gas, diamonds, minerals etc.
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sharing. The second expectation is therefore: Postconflict wealth sharing increases the likelihood
of sustainable peace.
Methods and Data
Data and Method
We use a Cox proportional hazards model to analyze how resource conflicts affect the duration
of post-conflict peace (See Table 1). The data for these analyses are structured as multiple-record
data with multiple events with censoring. Given that civil wars frequently occur in the same
country at different points in time, and indeed with the UCDP-PRIO data, more than one armed
civil conflict can occur contemporaneously, we must also account for a separate peace period
after the resolution of conflict between belligerents. To account for the obvious non-
independence of peace events we calculate robust standard errors. The basis of the dataset is the
UCDP/PRIO Armed Conflict Dataset 1946–2006 Version 4-2007 (Gleditsch et al., 2002;
Harbom, 2007).
To allow for time-varying covariates the dataset is disaggregated into ‘peace years’ for each
individual postconflict period. The first ‘peace year’ for each subject starts the first day of peace
after conflict and ends 31 December the same year. Next ‘peace year’ starts 1 January the
following year and ends 31 December, or the date the conflict resumes (failure). The subject
enters the dataset again the first day of peace after (if) the resumed conflict ends. Postconflict
peace periods that did not fail (no resumed conflict) before the last day of observation in the
dataset (31 December 2006) are right censored,
To be able to investigate postconflict peace duration, two conflict-related variables were added
to the existing dataset: A duration variable measuring the length of the postconflict peace period.
This variable is measured in days, and represents the number of days from the first day of peace
to the first day when the conflict again crosses the 25 battle-related deaths threshold. If the
conflict does not re-occur the end date is set to 31 December 31 2006, which is the last date in
the dataset. An additional event variable (censor) indicates whether or not the ‘peace year’ ends in
another conflict. The censoring variable is coded 1 if the ‘peace year’ ends in resumed conflict
(failure) and zero if it did not.
16
Wealth Sharing Variables We consider peace processes to address resource management issues through wealth
sharing if such tools are included in peace agreements or if governments establish such tools to
mitigate opposition. Each postconflict episode could include more than one type of wealth
sharing mechanism. The sources used for deciding the role played by resources in different
conflicts were used to find information on wealth sharing as well. We categorized the armed
conflicts in the UCDP/PRIO dataset according to the distinction between the three types of
wealth sharing outlined in the theory section: redistribution of wealth; resource portfolio; and
land reform. The categories were coded as non-mutually exclusive dummy variables.
Control Variables
We also included control variables to reflect conditions other researchers have found to influence
the probability of lasting peace in postconflict societies. The costs of war have often been viewed
as influential when it comes to the probability of achieving lasting peace in a post-civil war
country. It is assumed that the higher the costs, the higher the likelihood of lasting peace. The
intensity level of a civil war might influence postconflict peace duration. The intensity variable is
the best estimate of battle deaths from Lacina & Gleditsch (2005), updated with values from the
UCDP/PRIO dataset if a conflict is not listed in the Lacina & Gleditsch data. The variable is ln-
transformed to reduce skewness. In addition, how a conflict ended is strongly related to risk of
peace failure. We use the outcome variable from Kreutz (2008) to construct a dummy variable
with the value 1 if the conflict ended in military victory and 0 if not. To account for country
specific characteristics we include SIP2 scores (Scalar Index of Polities) from Gates et al. (2006)
to measure postconflict regime type. The variable is the average scores along three dimensions:
executive recruitment, constraints on the executive and political participation (Gates et al., 2006:
897f). It ranges from 0 to 1, with 1 representing an ideal democracy and 0 an ideal autocracy.
Other country specific variables are population data (in 1000s) from Penn World Tables 6.2
(Heston et al., 2006), and GDP per capita from the same source, supplemented by Gleditsch
(2002). Both variables are transformed using the natural logarithm.11
Postconflict Wealth Sharing 11 Likelihood ratio tests revealed that other potentially relevant variables, such as type of conflict (territorial or governmental), negotiated settlement or GDP growth, did not improve the models significantly. To obtain a parsimonious model these variables are not included in the analyses.
17
To test the effect of wealth sharing arrangements on reoccurrence of conflict we first tested the
three types on all conflicts, regardless of them being resource-related or not. Both resource
portfolio allocation and land reform reduce the likelihood of peace failure, however, the results in
model 3 are not significant. Redistribution actually has a positive effect on peace failure, although
this variable is also not significant. The control variables perform as expected, and similar to in
table 1. The number of battle deaths, military victory, political regime, and GDP per capita all
contribute to prolonging postconflict peace, while large populations increase the risk of peace
failure. All variables except political regime are significant.
Table 2
(3) (4) VARIABLES _t _t All conflicts Natural resource
conflicts Landreform -0.971 -0.935 (0.363) (0.403) Redistribution 0.172 -0.0860 (0.665) (0.859) elite_ws -0.124 -0.0345 (0.852) (0.969) Lnbtldead -0.0831* -0.0389 (0.0586) (0.546) Victory -0.838*** -0.585 (0.000259) (0.277) Lnpop 0.133*** 0.116 (0.00939) (0.237) sip2noneg -0.286 0.189 (0.291) (0.618) lnKSGgdppc -0.280*** -0.0979 (0.00182) (0.487) Observations 2354 654 R-squared . .
*** p<0.01, ** p<0.05, * p<0.1 Robust p values in parentheses
However, this is not very surprising since post-conflict wealth sharing should have a higher
effect on peace periods after resource conflicts. In Model 4 we look at the effect of wealth
sharing on peace duration following resource conflicts. The results do not change substantially,
although the sign of redistribution changes and is now negative. All wealth sharing variables are
18
non-significant.12The larger analysis does not give any support to the expectation we proposed.
Nonetheless, this might not be too surprising. There are few reasons to assume wealth
redistribution, resource portfolio allocation and land reform should have a positive effect on
peace duration for all types of resource conflicts. Postconflict wealth sharing mechanisms are
introduced to address exactly what is at stake in the specific armed conflict. Therefore, it is more
likely that some wealth sharing tools are more appropriate in certain contexts than others. To test
this, we calculated interaction terms between the types of resource conflict (financing,
distribution, intensifying) and types of wealth sharing. We used these to run additional analysis.
The interaction analysis did reveal some interesting results, but the number of cases is too small
to make any generalizations. However, looking into these cases could offer some interesting
information.
Table 3:
Internal Armed Conflict
Peace start
Peace end
Peace failure
Distribution & land refom
Distribution &resource portfolio
Financing & redistribution
Intensifying &resource portfolio
Kenya (Mau Mau) 1957 2006 No YesCongo/Zaire (Katanga) 1962 2006 No Yes Bangladesh (JSS/SB/Shanti Bahini) 1992 2006 No YesRwanda (FPR) 1994 1997 Yes YesMali (FIAA) 1995 2006 No YesGuatemala (various groups) 1996 2006 No Yes
The cases in Table 3 only show one incidence of Peace failure (i.e. relapse to conflict) where a
wealth sharing arrangement was included in the peace agreement. This is the failure of the
Arusha. Despite giving the ministerial post to an ethnic Hutu, they were not able to solve the
problem of land distribution. The remaining five cases all link wealth sharing to lasting peace.
The conflicts in Kenya, Bangladesh and Guatemala are all conflict over land distribution, where
land reform has been introduced. We see in all three peace processes that the measures that are
taken are detailed and feasible. The Katanga conflict in former Zaire was both a conflict over
distribution as well as financing. The wealth sharing arrangement included a 50/50 sharing of the
all taxes or duties on exports and imports and all royalties from mining concessions. The last
12 Because of high number of missing values for some of the control variables, the sample size is unfortunately severely reduced. Running the analysis without these variables do not alter the results for wealth sharing though.
19
conflict in Mali resources affected the conflict, but did not play a major role. In the peace
agreement following the conflict, more autonomy was given to the region, as well as rebels were
included in among others the Water and Forestry administration13. These six cases show that
when we linking specific wealth sharing remedies to specific resource conflict mechanisms, the
effect of wealth sharing arrangements become clearer. The positive result with the combination
of distribution conflict and land reform is particularly evident
Conclusion: Why Wealth Sharing Sometimes Doesn’t Work
The aim for this paper was to look into the relationship between natural resource driven conflict
and pos-conflict peace duration, and the remedies put in place to solve the issues in a peace
process. As we expected, we find clear evidence, that peace periods following resource conflicts
have a higher likelihood of falling back into conflict after a short period than non-resource
conflict. This is particularly true for resource finance conflicts.
However, we do not find any statistical evidence that wealth sharing arrangements help
ease the peace process after resource conflicts. This is not a very good sign for peacebuilding
policy makers. It is also in contradiction to the expectation we formed, which are based on the
desired results from a wealth sharing arrangement. However, looking deeper into the data we find
case studies that do support our expectation. However, as we have already suggested we need to
consider Jarstad’s (2008) discussion of the dilemmas of peacebuilding, especially how power
sharing can be a possible threat towards long term democratization and long term peace. This
might very well be true for wealth sharing as well. In the following we will look at possible
explanations for the results that we find in our analyses.
Firstly, it could be that the wealth sharing arrangements were never implemented. The
wealth sharing mechanisms might have satisfied the conflict parties, but the plan could be too
unrealistic to implement. For example promising more revenues to certain groups than the
government realistically could deliver. The Rwanda peace agreement states that “All refugees
shall therefore have the right to repossess their property on return” Arusha Agreement, 1993:
Annex V, Article 4). However, with already scarce land for the population living within the
Rwandan borders, this was a very difficult promise to keep. Also on the land the refugees’ once
had lived, others had lived and cropped the land for decades creating new conflicts of interest
(Bigagaza, Abong & Mukarubuga 2002). It can also be a lack of capacity or will to follow up 13 Information on the cases and the various wealth sharing arrangements can be found in the coding document for the natural resource conflicts and the wealth sharing arrangements.
20
resource management mechanisms. To be able to implement a comprehensive wealth sharing
scheme, a stable and legitimate state is needed. In Nigeria the state and the society is highly
affected by corruption. In theory Nigeria has a system that shall redistribute the oil revenues, but
due to corruption these revenues do not reach the civilian population (Elaigwu, 2007).
Another explanation could be that the wealth sharing arrangement might not have
satisfied all the parties in the negotiations. If the rebels feel that they are worse off with wealth
sharing, they might end up as spoilers. Spoilers are those who seek to derail the peace process
because they have something to lose by peace, either politically or economically. In postconflict
negotiations these spoilers can be one of the largest hinders to achieve a peace agreement.
Especially in situations where natural resources have been a part of the war economy, since peace
and stability in a country could mean that the spoilers lose control over lucrative illegal resource
trade and thus lose income. On the other hand trying to accommodate the rebel groups by giving
them more power or access to resources might help them finance a new uprising and the country
can fall back into conflict. This especially relates to wealth sharing arrangements organized as
resource portfolio. In Sierra Leone the RUF leader Sankoh was handed the “diamond ministry”
giving the RUF an opportunity to continue to exploit the diamond in the same way as before the
peace agreement (Alao & Ero, 2001). .
A third problem is how wealth sharing is perceived among the civil population. If there is
a feeling that some groups are better off than others due to the distribution formula it can either
create new grievance or reinforce old grievances related to horizontal inequality. There could be
several reasons for this type of perception. First of all some groups might not be included in the
wealth sharing arrangements because they were not directly a part of the conflict. Parties included
at the negotiation table can act as spoilers and in this way secure a better deal for their supporters.
If groups are given a lower priority because they are not considered as parties to the conflict, this
is a very strong signal that rebels and opposition groups gain by fronting violent conflict.
Secondly, some groups or regions could be dissatisfied with the way the wealth is distributed.
People living in resource rich areas might feel that they should be rewarded more than other
regions because they bear the costs of extraction. This has been one of the greater debates in
Nigeria in regards to redistribution of oil resources (Ejobowah, 2000). Regions without resources
might feel that a symmetric wealth distribution would be fairer. People in resource rich areas may
also argue that they should be awarded a greater share of the pie just because the resources are
located in the area where they live. For example the richer regions in Bolivia, such as Santa Cruz
and Tarija, do not want to share too much of their riches with the poorer regions in the Andes
mountains.
21
A fourth issue is the wording of the agreement itself. Often agreements use a very open
language that would probably satisfy all the participants. However, it is not defined what quality
of life, dignity and living conditions are. It can be interpreted in many different ways, hence this
can create a discrepancy between the expectations and what the wealth sharing arrangement
actually can deliver, which further can enforce existing grievances. A loose language might give
the state a leeway to not follow through with the agreement, because it is not clearly stated what
their responsibility is. However, in many cases it is necessary to use this type of language to be
able to agree on wealth sharing.
We must also consider that parts of the explanation for the results we find here can lie in
the data material. In this first trail to entangle the relationship between wealth sharing and lasting
peace we have not been able to code to what degree the wealth sharing mechanisms have been
implemented. We have assumed that wealth sharing has been touched up in the peace process it
is a good sign for establishing a lasting peace. However, an indication on whether the wealth
sharing arrangement was implemented would be an even better indicator. We hope to look into
this in the future.
Another problem is that issues concerning natural resources could be too difficult to
discuss in a negotiation situation and are therefore not addressed at all. This could have two
consequences for our analysis; first of all we could be missing agreements on wealth sharing that
happens after the violence ceased14. On the other hand if the issue of natural resource revenues is
not addressed right away the likelihood of falling back into conflict is probably greater.
A related issue is that it might not be the natural resources that are the real underlying
problem, even though the rebels’ demands might indicate this. In Nigeria, the population in the
Niger Delta feels they are deprived from the revenues that are extracted in the region, and that an
increase of revenues returned to the region would help to develop the region in matters of
infrastructure, health and education. However, the Niger Delta region has a higher GDP per
capita than many other regions in the country, but is not able to utilize the revenues they have.
This is mainly caused by the high level of corruption and the money disappearing on the way.
Considering this type of problem, a wealth sharing arrangement on its own will not solve the
problem. Even with a sound wealth sharing arrangement taking all the pitfalls mentioned above
in to consideration, the grievances are not solved because other factors (for example corruption)
hider the general public to gain from it.
14 Helga is going to check up the Diamond back to community program in Sierra Leone
22
Despite the fact that we do not find evidence that wealth sharing significantly increases
the likelihood for a lasting peace, we do think that wealth sharing arrangements are important in
mitigating conflict. The many of the case studies included in this study proves that On the other
hand one must be very careful when negotiating a wealth sharing arrangements and consider how
the distribution of wealth can possibly harm the civil peace in the long run, and what can cause
the wealth sharing arrangement to fail in its infant years. Also, wealth sharing as well as power
sharing is very dependent on the context, and in some cases a fruitful wealth sharing scheme
might be impossible. This paper contributes to the growing debate on post-conflict natural
resource management by providing two important new variables describing resource conflicts
and postconflict wealth sharing mechanisms. It is important to entangle these types of large
terms, because they all have different pitfalls that need to be addressed. Our main contribution to
policy makers is to point out the pitfalls that should be avoided or might cause future problems
in establishing a civil peace.
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