Oeindrila Dube and Juan Vargas, 'Commodity Price Shocks and Civil Conflict: Evidence from Colombia,' Review of Economic Studies, forthcoming.
Abstract: This paper explores how price shocks in international commodity markets affect armed con‡ict. Using a unique dataset on civil war in Colombia, we find that exogenous shocks to coffee and oil prices affect conflict in opposite directions, and through separate channels. A sharp fall in coffee prices during the late 1990s increased violence disproportionately in coffee-intensive municipalities, by lowering wages and the opportunity cost of recruitment into armed groups. In contrast, a rise in oil prices increased conflict differentially in the oil region, by expanding local government revenue and inviting predation on these resources. Our analysis suggests that the price of labor intensive agricultural goods affect con‡ict prim
