Extractive resource policy and civil conflict: Evidence from mining reform in the Philippines

Abstract

We estimate how a shift towards a more extractive resource policy, brought about by a regulatory reform of the mining sector, affected civil conflict in the Philippines. Our empirical strategy uses a difference-in-differences approach that compares provinces with and without mineral deposits before and after the reform. We find that the reform led to a large increase in conflict violence, most likely due to increased competition over control of resource-rich areas. The estimated welfare cost of this increase in violence is several orders of magnitude larger than the country's total revenue from taxes on mineral production.