Timothée Demont: timothee.demont[at]univ-amu.fr
Alice Fabre: alice.fabre[at]univ-amu.fr
The empirical and theoretical literature on the resources-conflict nexus unambiguously points at two mechanisms fueling conflicts: the rapacity channel and the opportunity cost channel. More valuable grabbable resources (rapacity) and less valuable income- generating resources (opportunity cost) both contribute to exacerbating conflict. We demon- strate that these widely accepted results rely on two key elements relating to market condi- tions and agents’ preferences. When prices are exogenous from the perspective of specific localities, the conventional result obtains since an increase in the profitability of either the appropriative or productive activity incentivizes agents to reorient efforts accordingly. When the commodities’ prices are set locally, however, the opposite result can obtain if one of the commodities is scarce. If the grabbable resource is abundant, the players’ relative marginal utility of the good will be low, thereby resulting in low relative prices. Exogenous increases in the quantities of such scarce goods will lead to a reduction of appropriation effort, while scarcities will be conducive to conflict. We show that the same results obtain in the absence of markets, as is the case when the stakes take the form of civil liberties and political rights.