oth with only the (narrow version of) _PI_ along with the residual νsrt ̂ (from the first stage using the other states’ prices index) and the full set of controls. The result in column (1) shows no significant impact of _PI_ on conflict events in Nigeria. That is the case also when we add the oil index along with its post-2009 interaction (column 2). The signs of the oil variables support both the ‘rapacity’ and the state capacity hypotheses. The oil index has a positive and significant effect on the number of conflict events the following year, in line with the ‘rapacity’ hypothesis: exogenous increases in the value of oil raise the incentive for fighting in the production areas. On the other hand, this effect disappears after the amnesty deal in 2009, confirming that the deal was effective in curbing violence in the Niger Delta states. The statistically insignificant association between the oil price index and conflict intensity after 2009 is consistent with the idea that the oil funds may have been used to demobilize militants in these areas thus countering the ‘rapacity’ effect from oil price increases (Sayne, 2013).

**Table 4: The impact** **<u>of price shocks on conflict events in Nigeria (2004-11)</u>**

||(1)|(2)|(3)|(4)|(5)|(6)|
|---|---|---|---|---|---|---|
|Dep. Variable<br>Instruments|Any event<br>PINAR<br>oth|Any event<br>PINAR<br>oth|Any event<br>CINAR<br>oth,PINAR<br>oth|Any event<br>CIBR<br>oth,PIBR<br>oth|Any event<br>CINAR<br>Intl,PINAR<br>Intl|Any event<br>CIBR<br>Intl,PIBR<br>Intl|
|_CINAR (t-1)_|||0.052***<br>(0.013)||0.053*<br>(0.030)||
|_PINAR (t-1)_|0.054<br>(0.053)|0.024<br>(0.052)|-0.047***<br>(0.012)||-0.001<br>(0.025)||
|Oil ind (t-1)||0.002**|0.003***|0.003***|0.003***|0.003***|
|.||(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|
|_Oil ind. (t-1) x_||-0.003***|-0.003***|-0.003***|-0.003***|-0.003***|
|_post-09_||(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|
|_CIBR (t-1)_||||0.038***<br>(0.011)||0.078*<br>(0.043)|
|_PIBR (t-1)_||||-0.036***<br>(0.01)||-0.008<br>(0.026)|
|Marginal effects: ch|ange in number|of conflict e|vents caused by|a 10% increa|se in price in|dex|
|_CI_|||2.97|2.31|2.83|4.51|
|_PI_||-|-2.30|-1.86|-0.05|-0.39|
|_Oil ind._||0.01|0.14|0.15|0.12|0.14|
|_Oil ind. xpost-09_||-0.02|-0.02|-0.02|-0.02|-0.02|

_Dependent variable is the number of any conflict events in the state in year t; all regressions include residuals from the first stage regressions of the endogenous price index on the excluded instruments as a control with appropriate standard errors (clustered at the state level) calculated; *, **, *** indicate statistical significance at the 10, 5, and 1 percent level, respectively. Data are for 37 states for 8 years (2004-11). All regressions include year and region effects as well as region-year effects and various controls (the log of population in 2003, the log of population density in 2003, the number of conflict events in 1997-2003, the poverty gap and headcount poverty in 2003, a dummy for multiple dominant ethnic groups, a dummy for more than 2 ethnic minorities, a dummy for whether the federal president is of the same ethnicity as the dominant group in the state and the interaction between this variable and the multiple dominant groups dummy). The models are estimated through the population-averaged negative binomial estimator for panel data._ 19