Resource rents, particularly of the point-sourced variety, were widely regarded to be a major factor contributing towards the risk of civil war in developing countries, following the influential work of Collier and Hoeffler (2004). According to this view, conflict reflects elite competition over valuable point-sourced natural resource rents, and this is when the rent-seeking contests associated with the presence of resource rents in weak institutional settings, which we reviewed in Chapter 3, descend into outright warfare. Fearon and Laitin (2003) argue that civil war risk is mainly attributable to diminished state capacity: the inability of the state to either provide public services or suppress rebellion in weak and failing polities with weak institutions that are also characterized by low incomes. Resource rents should augment the state’s resources, but not always when there is largescale rent-seeking by powerful actors.

There is a longstanding position, however, that relative deprivation (Gurr 1970) and the grievance that it produces fuel internal violence. Identity can be crucial to grievance mobilization. This is due to the collective action problem, as discussed in Olson (1965). Ethnic identities, whether based on race, language, religion, tribal affiliation or regional differences, may serve as a more effective amalgam for the purposes of group formation, compared to other forms of more transient difference, such as socio-economic class. The formation of enduring identities is therefore central to mobilizing groups; see Tilly (1978) on this. Large-scale conflict between groups cannot proceed without the presence of palpably perceived group differences, or grievances, which may have historical dimensions. More recently, Stewart (2000) has introduced the notion of horizontal inequality, the inequality between groups, rather than the inequality that may exist between individual households in an otherwise ethnically homogeneous population (vertical inequality). In this connection, it has to be borne in mind that resource rents may become a source of grievance, if they are distributed unequally, or if certain groups are excluded from the benefits of the resource rents, particularly in resource-producing regions.

This chapter reviews how the presence of natural resource rents can encourage internal conflict, usually taking the form of civil war.