Buying Peace? Oil Wealth, Corruption and Civil War, 1985—99

This article argues that, contrary to received wisdom, political corruption is not necessarily associated with a higher risk of civil war in oil-rich states. Political corruption can be used to accommodate opposition and placate restive groups by offering private privilege in exchange for political loyalty. Since oil wealth is associated with large rents accruing in state treasuries, it provides an economic foundation for such clientelist rule. This article thus argues that oil-rich governments can use political corruption to buy support from key segments of society, effectively outspending other entrepreneurs of violence. Based on a logit analysis of civil war onsets, 1985—99, the article finds support for this `co-optation argument'. A negative and statistically significant interaction term between oil production and political corruption is consistent across different models and robust to a number of specifications. While both variables per se increase the risk of conflict overall, higher levels of corruption seem to weaken the harmful impact of oil on the risk of civil war. This finding suggests the need for a more nuanced understanding of the relationship between natural resource wealth, governance and armed conflict. Political corruption has prolonged poverty and bred economic and political inequality in many oil-rich states, but it has also helped cement powerful alliances with a stake in the continuation of the corrupt regimes.