Is resource endowment a trigger for conflicts in sub-Saharan Africa? Unveiling the moderating role of income inequality

Abstract

The literature on the effect of natural resources on conflicts is far from being conclusive. Recent evidence suggests that the relationship between natural resources and violent conflicts may be influenced by income inequality. That is, inequitable distribution of economic and natural resources increases the incentives for resource-rich countries to engage in conflicts. The main contribution of this study to the growing body of research on natural resources and conflicts is that it provides empirical evidence on the moderating role of income inequality in natural resources—conflict nexus in SSA. The study adopts the ordinary least square (OLS), the two-step system GMM and Driscoll and Kraay covariance estimator. The result shows that natural resources do not have any direct effect on conflicts. However, the interaction of income inequality and natural resources increases conflicts in SSA. The result also shows that quality of government, domestic investment, regime durability, and education are important determinants of conflicts in SSA. Lastly, the result shows that tax revenue has a negative and statistically significant effect on conflicts. The research and policy implications are discussed.