Stimulant or Depressant? Resource-Related Income Shocks and Conflict

109 Pages Posted: 23 Oct 2019

See all articles by Kai Gehring

Kai Gehring

Heidelberg University; University of Zurich - Chair of Political Economy; CESifo

Sarah Langlotz

Goettingen University

Kienberger Stefan

Salzburg University

Multiple version iconThere are 2 versions of this paper

Date Written: 2019


We provide evidence about the mechanisms linking resource-related income shocks to conflict. Combining temporal variation in international drug prices with spatial variation in the suitability to produce opium, we show that higher drug prices reduce conflict over the 2002-2014 period in Afghanistan. There are two main mechanisms. First, household living standards and thus the opportunity costs of fighting increase. Second, we hypothesize that the opportunity cost effects dominate contest effects if the degree of group competition over valuable resources is sufficiently small. Regressions using georeferenced data on drug production, ethnic homelands, and Taliban versus pro-government influence support this hypothesis.

Keywords: resources, resource curse, conflict, drugs, illicit economy, illegality, geography of conflict, Afghanistan, Taliban

JEL Classification: D740, K400, O530, Q100

Suggested Citation

Gehring, Kai and Gehring, Kai and Langlotz, Sarah and Stefan, Kienberger, Stimulant or Depressant? Resource-Related Income Shocks and Conflict (2019). CESifo Working Paper No. 7887, Available at SSRN: or

Kai Gehring (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117

University of Zurich - Chair of Political Economy ( email )

Rämistrasse 71
Zürich, CH-8006
+4917620916056 (Phone)


CESifo ( email )

Poschinger Str. 5
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Sarah Langlotz

Goettingen University ( email )

Platz der Göttinger Sieben 5
Professur für Entwicklungsökonomik (Prof. Fuchs)
Goettingen, DE 37073

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Kienberger Stefan

Salzburg University ( email )

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