Land-use transformation and conflict: Evidence from Indonesia’s oil palm boom

Abstract

Agricultural commodity booms can cause violent social conflict by creating incentives to transform land use, a channel distinct from the income shocks emphasized in the existing literature. Studying Indonesia's oil palm boom, we use agricultural suitability and available land to measure local incentives for plantation expansion. This expansion pressure causes conflicts, particularly over resources and during local elections. These effects are amplified where land is scarce and more contestable. Separately, economic shocks increase conflict on existing plantations. Our findings show that agricultural booms can destabilize communities through competition over future rents and increased vulnerability to economic shocks.

Keywords: conflict, resources, palm oil, land-use change, Indonesia

JEL Classification: O13, Q15, Q34, D74