COMPLICATING THE CURSE: RESOURCE EXTRACTION AND THE EMERGENCE OF REBEL GOVERNANCE INSTITUTIONS IN CIVIL CONFLICT

Abstract

How might participation in natural resource economies drive rebels to govern? Previous studies have argued that resource rich groups lack incentives to establish governance institutions. These accounts treat extraction as a homogenous activity with uniformly negative effects. I challenge this assumption, proposing a novel theory that extraction creates such incentives by increasing administrative demands and dependence on civilian labor. Specifically, the mode by which rebels earn revenue from commodities—their chosen extraction “strategy”—augments their relationship with civilians and the institutional pressures they face. Strategies that are sustained and proximate to the production process generate pressure to institutionalize that more transient or production-distant strategies do not. I test this theory using cross-national data that not only identifies whether groups extract but how, paired with data capturing an array of rebel governance institutions. I find that extractors govern at least as much as non-extractors, and significantly more for certain institutions. Extortion, the most proximate and sustained strategy, has the broadest and most robust associations with governance, including taxation, constitutions, infrastructure, and education. Smuggling is only associated with increased policing. Groups that steal or sell booty futures almost never provide health, education, constitutions, and infrastructure. This heterogeneity in institutional outcomes demonstrates the importance of disaggregating “resource extraction” conceptually: resource wealth itself does not make or break governance, but the form in which that wealth is created does.