On Wednesday, December 2nd, at 2.30pm, the NOVAFRICA Center welcomes Arinze Nwokolo, from the University of Navarra to present his work on oil price shocks and how they affect civil conflict in Nigeria.
This article examines the effect of oil price shocks on civil conflict. Our difference-in-difference method exploits oil price changes in international market and conflict outcomes in Nigeria. We find that an increase in oil price increases conflict in the oil region in Nigera. Using district level data on income and pollution we explore two possible channels of oil shock on conflict. Under the income shock effect we examine the effect of oil price changes on district revenue and wages. We find that an increase in oil price increases district revenue (rapacity effect) but lowers wages (opportunity cost effect) in oil districts. We study, under pollution shock, the effect of gas flares and oil spills on district level health outcomes and agricultural households. We find that oil price shock increases conflict in flaring districts but not in district with oil spills. We argue that this difference is due to increases infant mortality (grievance and opportunity cost effect) in flaring districts. We validate these using survey data on health and agricultural households.