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Oil and terrorism: an investigation of mediators

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Abstract

Do states with oil wealth experience more terrorism and, if so, why? Drawing from the intrastate war literature, this study considers several factors that prospectively mediate the relationship between oil wealth and terrorism: state weakness; rentier state authoritarianism; corruption of government officials; income inequality; human rights violations; foreign military intervention; and heightened separatist activity. Based on structural equation modeling on a sample of 130 non-OECD countries for the period 1970–2012, the paper produces two main empirical findings. First, while onshore oil production increases terrorist attacks in countries, on- and offshore production and oil revenues from exports do not increase such attacks. Second, the impact of oil on terrorism is mediated through increased human rights abuses. Exploitation of oil is found to be associated with a worsening of physical integrity rights abuses that, in turn, lead to popular grievances that help to fuel terrorist campaigns.

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Notes

  1. An exception can be found in Dreher and Kreibaum’s (2016) study that finds ethno-political groups residing in oil-rich regions within Middle Eastern countries are less likely to engage in terrorist activity versus other tactics. That study focuses on groups and is confined only to 13 Middle Eastern countries over the 1980–2004 period.

  2. The study focuses on developing (non-OECD) countries and excludes from the analysis rich, developed oil producers like Canada, the United Kingdom and Norway. Current empirical research shows that wealthy oil countries with high government capacity and strong democratic institutions do not experience the same types of adverse outcomes as other “resource cursed” nations (see, for example, Bjorvatn et al. 2012). As a check, I ran the main models on OECD oil producers and found oil production to be a negative but non-significant predictor of terrorism; the opposite correlation is found for non-OECD countries. This result suggests that oil wealth impacts terrorism very differently in developed versus developing countries.

  3. These seven mediators are not exhaustively representative of the potential processes by which oil and terrorism may be linked. They are, however, broadly representative of structural, institutional and state behavioral elements that scholars studying intrastate conflict discuss. Nor are they mutually exclusive; they may overlap and reinforce one another. Motivated by this second possibility, I conducted a set of tests using interaction terms produced from all paired combinations of the seven mediators (21 in total). None of these were found to be significant.

  4. Paine (2016) adds nuance to this contention. Using a formal model and statistical tests, he argues that oil revenues strengthen states, making them less susceptible to civil conflicts focused on central government regime change. However, civil conflicts focused on separatism are not reduced by oil revenues.

  5. Because the dependent variable is a non-negative count indicator of terrorist attacks occurring in a country in a year, which exhibits over-dispersion, I use a negative binomial estimation technique (see Brandt et al. 2000). Note that for each of the negative binomial estimations, I calculate robust standard errors that are clustered on country.

  6. Partial mediation is said to be evidenced when four conditions are present: (1) the independent variable [x] significantly predicts the mediator [m]; (2) the independent variable predicts the dependent variable [y] in the absence of the mediator; (3) the mediator significantly predicts the dependent variable; and (4) the impact [size of the coefficient] of the independent variable on the dependent variable is diminished when the mediator is added to the estimation (see Baron and Kenny 1986; Hayes 2013).

  7. Updated through 2012.

  8. Note that Ross (2012) provides data on net oil exports. I remove the negative values, truncating the indicator at zero for all net importers of oil. This is because my objective is reasonably to proxy the national oil income rather than balance of trade. Also note that to create the on- and offshore indicators of oil production and income, I multiplied the raw measures of oil production and income by on- and offshore dummies provided by Ross.

  9. Conversely, low tax revenues to GDP could also indicate a more repressive state that has crowded out private enterprise.

  10. Varaible: “vdem_excrptps.” Data downloaded from Quality of Government database from http://qog.pol.gu.se/data/datadownloads/qogstandarddata.

  11. Confidence interval of .003–.141.

  12. Note that the differences may seem trivial, but terrorist attacks are rare events. The average marginal number of attacks per year experienced by all non-OECD countries is 3.2.

  13. In theory, it is possible that human rights abuses are endogenous to terrorist attacks. This would complicate interpretation of the “b” leg of the relationship in the model. Such a finding does not exclude the possibility that countries experiencing high levels of terrorism would then subsequently feature a worsening of human rights abuses as they ramp up counterterrorism efforts. In the results reported in Table 2, all of the mediators are lagged by 1 year to help clarify the direction of causation. As a further check I lagged the human rights abuse indicator by another 3 years and found the same results. However, it is important to note that a country’s physical integrity rights typically change slowly from year to year, if at all. This significantly complicates the ability to definitively determine a causal relationship between human rights violations and terrorism.

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Acknowledgments

This material is based upon work supported by or in part by the U.S. Army Research Laboratory and the U. S. Army Research Office through the Minerva Initiative under Grant No. W911NF-13-0332.

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  1. Department of Political Science, The Pennsylvania State University, 330 Pond Laboratory, University Park, PA, 16802, USA

    James A. Piazza

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Piazza, J.A. Oil and terrorism: an investigation of mediators. Public Choice 169, 251–268 (2016). https://doi.org/10.1007/s11127-016-0357-0

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