points. We show that the difference with the results in B-B is mainly due to the fact that we construct the price index using levels rather than changes in prices.

The impact of export prices on conflict is mainly driven by point-source extractive commodities such as oil and minerals, while the prices of diffused agricultural crops have no discernible impact on conflict. This finding is consistent with the idea that an increase in the value of exported extractive commodities raises the value of the prize to be gained through fighting. On the other hand, we find no support for the ‘opportunity cost’ theory via exported commodities. In fact our evidence is more in line with the hypothesis that agricultural exports may serve to fuel rather than to quell existing conflicts, possibly by providing a source of funding for active rebel groups.

These results (like the others in the analysis) are robust to a large array of battery checks, but they do not hold for major civil wars. This may suggest that the fighting could erupt in the areas where the resources are concentrated without eventually evolving into a civil war. However, this finding could also be the product of a large ‘rare event bias’ for the major conflict variable. In the absence of a clear interpretation of the results for major civil wars, we mainly rely on the results based on all conflicts.

Our results also suggest that trading with contiguous countries helps reduce the duration, but not the onset, of conflict. This is consistent with the idea that such trade reduces the incentives of contiguous countries to fuel conflict in their neighbor. In addition, we find that trading with neighbors is also associated with a lower risk of conflict when such trade occurs under RTAs.

On the other hand, neither imported commodity prices nor the economic cycle in export markets appear to exert any influence on the probability or the duration of conflict.

We also model some of the heterogeneity of the effects of trade shocks on conflict onset across countries by using four types of conditioning factors, i.e. grievances, type and quality of state institutions, conditions in neighboring countries, and measures affecting the transmission of international prices to domestic prices. Grievances and the conditions in neighboring countries appear to be particularly important in making a country more or less exposed to conflict as a result of export price shocks. But good governance and domestic policies affecting the transmission of international to domestic prices seem also to play some role in this respect. Finally, our BMA analysis also suggests that export shocks are particularly dangerous right after election years.

As with all cross-country analyses, it can be difficult to draw policy recommendations for specific countries. However, these findings do have a number of general policy implications, which we sketch here. First, revenues from exports of extractive resources need to be managed in a way that is sensitive to their potential to be associated with conflict, especially in countries located in unstable regions, with a recent history of conflict, and with weak governance. In these countries, sudden windfall revenues from swings in international prices (or new discoveries) can substantially increase the risk of conflict.

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