The resource curse is coming to town

The discovery of oil deposits has, in many ways, been a curse for Nigeria's Ogoniland province, which has been plagued by environmental degradation and civil conflict (courtesy of Reuters).

The discovery of oil deposits has, in many ways, been a curse for Nigeria’s Ogoniland region, which has been plagued by environmental degradation and civil conflict (courtesy of Reuters).

Oil and natural gas from shale will be a “game changer” for Ohio, one that “has given fresh life to energy development,” according to Jack Gerard, the president & CEO of the American Petroleum Institute. The Plain Dealer has matter-of-factly stated that the boom in hydraulic fracturing, or fracking, in states like Ohio is “expected to create thousands of jobs and add billions to the state’s economy.”

That expanded oil and gas production will generate myriad economic benefits is largely taken for granted in most circles. For the most part, opponents of fracking for oil and gas have focused almost exclusively on the potential environmental consequences, such as water and air pollution, radioactivity, and an increased risk of earthquakes.

But a new study from Headwaters Economics has thrown some cold water on this conventional wisdom. What if, instead of bringing socioeconomic development to energy-rich areas, oil and gas production could actually make these communities worse off?

The natural resource curse

This concept, the so-called “natural resource curse,” has long been studied in international relations and environmental circles. Several studies have demonstrated a strong connection between natural resource abundance and stymied economic growth on an international level, particularly in the developing world. In a 1995 paper, Sachs & Warner concluded that reliance on natural resource dependence can decrease economic growth by around 1% per year.

natural resource dependence and growth rates

This figure, from Sachs & Warner (2001), charts the relationship between natural resource dependence and economic growth rates from 1970-1989. As it suggests, those countries whose economies depend heavily on natural resource exports had lower real growth rates during this period, and vice versa.

There are several reasons (PDF) why natural resource wealth and dependence could harm socioeconomic development. I will outline three below.

First, a boom in natural resource extraction can increase price levels throughout the economy (PDF), raising a country’s exchange rate. As a result, resource wealthy states tend to have higher costs for export goods, reducing their competitiveness on global markets.

Secondly, higher real wages can create an incentive for individuals to forgo employment in other areas to pursue opportunities in the extractives industries. This reliance upon extractives can crowd out investment in manufacturing, limiting the ability of the industry to become more efficient over time. These outcomes can harm innovation and entrepreneurship (PDF), which may create long-lasting ramifications for the economy.

Thirdly, resource-dependent countries are highly susceptible to rent-seeking behavior and the pathologies that can come along with it, such as political violence, up to and including civil conflict. As de Soysa and Binningsbø (paywall) put it:

Resource rents apparently create factional political states, where rent capture allows politicians to survive by dispensing rents, rather than making hard choices about reform. Political survival dictates profligacy and waste, rather than providing public goods.

Rather than investing in important public goods, leaders of resource-rich states can simply make direct payments to important elites or buy off potential challengers. Resource revenues also tend to accrue to state, rather than staying in source communities. As a result, while some actors will benefit from extraction, the communities on the ground tend to suffer the effects without reaping the rewards.

The lure or resource rents can also drive groups to try to capture control of the state. As a result, a plethora of studies have shown that states dependent on natural resources experience higher rates of internal political violence (paywall) and a greater risk of experiencing civil war.

six western states oil and gas income levels

The study explores the effects of oil and gas development on socioeconomic development in six states from 1980-2011 (courtesy of Headwaters Economics).

The resource curse comes to the United States

But while the negative consequences of resource dependence are well-known for the developing world, the same cannot be said for the Untied States. In order to investigate the long-term impacts of using oil & gas extraction as an economic development policy, Headwaters analyzed the effects of an early 1980s oil boom in six Western states: Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming. The study explored the long-term impacts of the boom on social and economic development from 1980-2011, analyzing data from 207 counties in the states.

While many observers consider the oil and gas boom to be a positive development in the West – the curren oil boom in the Bakken shale has helped lower North Dakota’s unemployment rate to just over 3% – Headwaters’ findings challenge this perception. Rather than contributed to sustained, positive outcomes, these counties actually experienced many of the same consequences of the resource curse that I outlined earlier.

First, the authors found that the counties most dependent on oil and gas extraction actually had lower levels of per capita income during this period. These counties saw per capita income levels decrease by $7,000, on average. One reason for this outcome may be that boom towns typically see the cost of living skyrocket in the short-term, which can raise prices and offset income gains. In Fort McMurray, the heart of Alberta’s tar sands industry, for instance, the population has tripled in recent decades. The formerly rural area, which is now bursting at the seams, has the highest housing prices in Alberta, and is deficient in 70 of 72 quality-of-life indicators.

Secondly, the study suggests that the resource sector can have a crowding out effect. The lure of the extractives industries, which have lower education requirements, tends to lower the percentage of adults with a college education. Those counties that were most heavily invested in oil and gas had, on average, 2.5% fewer college-educated adults than the rest of the sample counties. And the environmental consequences of resource extraction are well known.

Thirdly, the authors note that “the longer a county has been specialized on oil and gas, the higher the county’s crime rate.” This outcome would seem to reflect the fact that natural resource dependence leads to rent-seeking behavior and increased levels of violence. Most oil and gas boom towns are chock full of young men. The flood of young men into the Bakken shale (where they outnumber women by nearly 2-1 in some areas) has driven up crime rates by as much as one-third in Montana and North Dakota. Many women have reported being sexual harassed and feeling increasingly threatened due to the changing demographics.

The study fails to examine the environmental and public health impacts of resource dependence. However, other studies have shown that coal-mining communities in Appalachia have significantly higher adult and child mortality rates (PDF) than other communities in the region.

While the authors of the Headwaters study are careful to point out its limitations – causality cannot be proven and the results are unique to the sample areas – it does provide a cautionary tale to officials who are hoping to cash in on their region’s natural resource endowments.

Oil and gas extraction can be a way to jump start a stagnant economy in the short-term, as the study suggests. But states need to ensure that they are taxing resource extraction appropriately and investing these tax revenues in public goods for the communities on the front lines. Though bending over backwards for the oil and gas industries – as Ohio’s Republican lawmakers appear all too eager to do – may benefit some well-connected individuals, many more in these communities will suffer in both the short- and long-term.

Oil and gas deposits can be important endowments, but they don’t constitute a real development strategy. States need to think twice before putting all their eggs in one basket.

Africa’s Great Lakes were central to human evolution

victoria falls

Cross-posted from Drink Local. Drink Tap., Inc.

great lakes of africa map

The Great Lakes region of Africa (courtesy of the Proceedings of the National Academy of Science).

If you’ve ever felt inexplicably drawn to Lake Erie or any of the other Great Lakes, you’re not alone. In fact, that attraction is hardwired into your genes.

Last month, two UK researchers published an article titled “Early Human Speciation, Brain Expansion and Dispersal Influenced by African Climate Pulses” in the online, open-source journal PLOS One. The piece explores a variety of close linkages between climatological variability and human evolution throughout Sub-Saharan Africa. It focuses, in particular, on the East Africa Rift System (EARS, for short), which is home to the bodies of water that make up the Great Lakes of Africa.

Africa’s Great Lakes region is home to several of the largest bodies of freshwater in the world. The lake system includes Lakes Victoria, Tanganyika, and Malawi, along with several other smaller bodies of water. These lakes are the lifeblood of the region and are home not only to the world’s largest waterfall, Victoria Falls, but also to the headwaters of the Nile River.

In the article, researchers Susanne Shultz and Mark Maslin sought to determine what factors contributed to the punctuated nature of human speciation and dispersal from East Africa. They focus, in particular, upon a particularly important period for human evolution, which occurred roughly 1.9 million years ago. This period gave rise to the Homo genus and witnessed a series of major migration events from East Africa into Eurasia.

Schultz and Maslin noticed that several of these major “pulses” in human evolution corresponded closely to the appearance and disappearance of the East African Great Lakes. As a result, their research probed this connection more deeply. Their results suggest a close relationship between the growth and decline of the EARS lakes and significant steps forward in human evolution:

Larger brained African hominins colonised Eurasia during periods when extensive lakes in the EARS push them out of Africa. Taken together, this suggests that small steps in brain expansion in Africa may have been driven by regional aridity. In contrast, the great leap forward in early Homo brain size at 1.8 Ma [million years ago] was associated with the novel ecological conditions associated with the appearance and disappearance of deep-freshwater lakes long the whole length of the EARS.

As this article suggests, Africa’s Great Lakes are more than simply natural resources that serve economic, social, political, cultural, and ecological purposes. They are, quite literally, engrained in our DNA.

victoria falls

Victoria Falls lie along the border between Zimbabwe and Zambia (courtesy of Wikimedia Commons).

Yet, tragically, these lakes and the people who depend upon them face a host of threats. The region has experienced extremely high rates of deforestation in recent decades due to unsustainable economic development, ongoing conflict, illicit logging, and dam construction. Annual rates of deforestation in the Congo River Basin doubled during the period from 2000-2005.

The ongoing conflict in the Democratic Republic of Congo (DRC) has displaced millions, forcing many of them to encroach upon protected areas. In Africa’s oldest park, Virunga National Park, rates of illegal logging have reached 89 hectares (220 acres) per day (PDF). And the Gibe III dam in Ethiopia is drying up Lake Turkana, threatening the livelihoods of tens of thousands of indigenous peoples.

Despite being home to 27% of the world’s freshwater, less than two-thirds of people in the Great Lakes region have access to improved water sources. Climate change is expected to exacerbate this issue even further. The IPCC projects that the total number of Africans facing water stress will climb to 75-250 million by the 2020s and 350-600 million by the 2050s.

But you don’t need to sit by and watch these Great Lakes dry up. Drink Local. Drink Tap., Inc.™ has been working to provide access to clean water for children in Uganda for the last three years. This winter, the organization will undertake three new projects to ensure that the children at St. Bonaventure Primary School and the Family Spirit AIDS orphanage can take advantage of their human right to clean water.

Just as East Africa’s Great Lakes are a part of our DNA, so too is access to clean water and sanitation an integral part of human development. We can all take small steps to ensure that we are protecting this human right for people at home and around the world

Bringing Natural Resources to the Table: ELI, UNEP Launch New Environmental Peacebuilding Platform

sierra leone artisinal mining
sierra leone artisinal mining

Artisinal mining provides livelihoods for roughly 150,000-200,000 people in Sierra Leone (courtesy of UNEP).

I have a guest post up at the Wilson Center’s New Security Beat on environmental peacebuilding and the work that the UN Environment Programme and the Environmental Law Institute are doing in this area. [Full disclosure, I interned at ELI working on this program from late 2011-early 2013].

Here’s a snippet:

Moreover, UNEP found in 2009 that, although natural resources played a role in roughly 40 percent of all civil conflicts since 1960, new natural resource management schemes have been included in just one-quarter of peace agreements.

The evidence clearly indicates that if we hope to end violent conflict around the world, the environment must be a part of the process. As UNEP noted in its landmark report, From Conflict to Peacebuilding, “integrating environmental management and natural resources into peacebuilding…is no longer an option – it is a security imperative.”

Go read the rest and check out the rest of the great content housed on the blog.

Celebrating World Water Week & supporting Drink Local. Drink Tap., Inc.

Ugandan child collecting water
Ugandan child collecting water

A child at the Family Spirit AIDS orphanage collects water from a gravity-fed system installed by Drink Local. Drink Tap., Inc.

I’ve been doing some work with Drink Local. Drink Tap., Inc., a Cleveland-based NGO that focuses on promoting clean water both locally and in the Great Lakes region of Africa. The organization focuses on inspiring “individuals to recognize and solve our water issues through creative education, events, and providing safe water access for people in need” through education & awareness raising, advocacy, and service.

In order to commemorate World Water Week and 2013, which is the International Year for Water Cooperation, I wrote a guest blog post for DLDT on how water can be a tool for peacebuilding, cooperation, and cross-cultural understanding.

I would encourage you to check it out and support their work. If you are based in Cleveland, they are hosting a beach clean-up at Edgewater Park tomorrow from 10am-12pm, with a party hosted by Barefoot Wine & Bubbly afterwards. Otherwise, you can make a financial contribution to support their work in Northeast Ohio or in Uganda.

Beginning in December, DLDT’s founder and Executive Director Erin Huber will travel to Uganda to help provide clean water to children living in an home for orphans of the HIV/AIDS epidemic. To figure out how you can support DLDT’s work, visit their site.

Recent conference presentations

UPDATE: April 22 at 1:51pm

As I mention below in the original post, the organizers of the JIS & GSC Spring Research Symposium on Human Security and Development made an audio recording of the presentations. Here is the audio from my presentation:

Additionally, if you’d like to hear the other excellent research presented at the conference, you can visit the Journal of International Service‘s YouTube page.

____________________________________________

As noted in a previous post, I recently delivered presentations at two research conferences for graduate students in the Washington, DC area.

Last Friday, 3/22, I delivered the findings from my paper, Breaking the Conflict Trap: On the Factors Contributing to Civil War Recurrenceto the 2nd annual Graduate Student Research Conference at George Mason’s School of Public Policy. A copy of my presentation is available below:


Last evening, I presented the preliminary findings from my Masters thesis research at the Journal of International Service & Graduate Student Conference’s Spring Research Symposium, which focused on human security & development. My presentation, titled “Disasters as Conflict Triggers: A New Framework for Analysis in Conflict-Affected & Post-Conflict States,” focused on my work analyzing the linkages between disasters and conflict in fragile settings. It includes a case study of conflict dynamics of the international response to the 2005 Kashmir Earthquake in Pakistan. A copy of my presentation is below. I will also upload the audio from the presentation as soon as it is available.


Reshaping America’s climate and food aid policies to tackle instability

UPDATE (4/3/13 at 1:08pm): The New York Times ran a piece this morning reporting that the Obama administration has proposed changing the US food aid system to purchase crops from local producers, as I suggested below. While this change faces major opposition from big agribusiness and shipping interests, it would be a major feather in the cap for the President, and I commend his effort.

I submitted the following to the Center for International Policy Student National Security-Foreign Policy Solutions Contest:

Recently, the Center for American Program released a report that traced the connection between climate change and the Arab Spring. It illustrated how a volatile mix of extreme weather, reduced food production, and food price spikes contributed to the instability that ripped through the Middle East and North Africa (MENA) in 2011. Following a rash of extreme weather events, including severe drought and wildfires in Russia & Ukraine – which scientists have connected to climate change – the price of wheat jumped from just $4 per bushel in July 2010 to nearly $9 by February 2011. For the average Egyptian family, which spends 40% of its income on food, watching the price of food stuffs increase by up to ten-fold was too much to bear. Egyptians marched through the streets carrying loaves of bread and demanding the end of the Mubarak regime.

Changes in the FAO World Food Price Index and major instability events globally from 2008-2012 (courtesy of American Security Project).

Changes in the FAO World Food Price Index and major instability events globally from 2008-2012 (courtesy of American Security Project).

The Arab Spring is far from the only time that food price spikes have driven instability and revolt, however. Food riots destabilized Haiti in 2008, while the Tortilla Crisis rocked Mexico in 2007. The violent response by Liberia’s Tolbert regime to rice riots in1979 contributed to Samuel Doe’s coup the following year.

Given this clear link between food shocks and domestic instability, it will be vital to address food security concerns in a greenhouse world. IFPRI projects that food prices will rise across the board through 2050, with increases up to 100.7% for maize. Research suggests that climate change could significantly reduce crop yields  in Sub-Saharan Africa by 22%. The US is suffering from an historic drought, which affected 80% of farmland and reduced grain yields by 8%. Globally, grain consumption has exceeded production in 8 of the last 13 years. This trend is likely to worsen in the future, particularly as China increases its grain imports; research suggests Chinese grain yields could decrease by 37% in the coming decades.

Projected changes to cereal productivity, due to climate change, through 2080 (courtesy of UNEP/GRID Arendal).

Projected changes to cereal productivity, due to climate change, through 2080 (courtesy of UNEP/GRID Arendal).

In his inaugural address, President Obama said he “will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations.” To live up to this statement, the President should use his second term to tackle the climate-food insecurity nexus by leading on international climate negotiations and reforming US food policy.

First, the President and Secretary of State John Kerry must work proactively with the leaders of developed countries, India, and China to meet their commitment to craft a legally-binding international climate treaty by 2015. Secondly, the President must coordinate with our OECD partners to fulfill their 2009 pledge to provide $100 billion per year to tackle climate change in the developing world. A portion of these funds should finance climate-resilient agriculture for smallholder farmers. This investment should promote proven agricultural tactics, including agroforestry and regional seed banks.

Thirdly, the President should begin a conversation to change the face of US farm policy. Currently, inefficient farm subsidies in the US and the European Union encourage wasteful and otherwise noncompetitive practices. Western governments spend $2.50 per day in subsidies on each head of cattle, compared to just $0.90 per day for children in the developing world. Additionally, Western farm subsidies allow farmers to produce commodity crops at below-market prices; in turn, Western governments dump this surplus crop on the world market, undercutting farmers in the developing world. President Obama should use the negotiations with the EU over the proposed trans-Atlantic free trade zone to reform these harmful subsidies.

Pakistani soldiers unload food aid from a US Navy helicopter during the 2010 Pakistan Floods relief effort (photo courtesy of  Paula Bronstein/Getty Images).

Pakistani soldiers unload food aid from a US Navy helicopter during the 2010 Pakistan Floods relief effort (photo courtesy of Paula Bronstein/Getty Images).

Lastly, President Obama should use his executive power to reform the way the federal government distributes food aid.  According to Oxfam, the current US food aid system loses at least $500 million annually from waste and inefficiency. Reforming this system could enable food aid to reach an additional 17 million food insecure people. Currently, federal law requires that the US government purchase 75% of its food aid domestically and ship it to recipients. Transportation costs eat 65% of the total budget. Pilot programs demonstrate that purchasing food from local producers can reduce costs by 54% and cut delivery time by 62%. These common-sense reforms would save lives, taxpayer money, and reduce food waste in a time of worsening food insecurity.

The agenda I have laid out is broad and complex; however, the threat that climate change and food security pose to the developing world is as well. If President Obama moves on these items, he will go a long way towards tackling the climate crisis.

Upcoming conference presentations

I will be presenting at two upcoming conferences for DC-area graduate students later this month.

March 22, I will present my paper, Breaking the Conflict Trap: On the Factors Contributing to Civil War Recurrence, at the 2nd annual Graduate Student Research Conference at George Mason University.

Map of the affected areas & epicenter of the 2005 Kashmir Earthquake. Courtesy of the BBC.

Map of the affected areas & epicenter of the 2005 Kashmir Earthquake. Courtesy of the BBC.

The following Tuesday, March 26, I will present initial details from my current research project, Where DDR Meets DRR, at the Graduate Research Symposium, sponsored by the Journal of International Service and the AU SIS Graduate Student Council.

My presentation will focus the theoretical framework that I have developed, which explains a set of potential pathways linking disasters to conflict in conflict-affected states. Additionally, I will present preliminary evidence of the conflict dynamics of the international response effort to the 2005 Pakistan Earthquake. This work will form the basis of the capstone research for my Master’s program.

I will upload the Powerpoints for each presentation to this site after I have completed them.