Commodity Booms, Conflict, and Organized Crime: Logics of Violence in Indonesia’s Oil Palm Plantation Economy

Original

Commodity Booms, Conflict, and Organized Crime: Logics of Violence in Indonesia’s Oil Palm Plantation Economy

Paul D. Kenny, Rashesh Shrestha, Edward Aspinall

Abstract

This article examines the relationship between commodity booms and the incidence of group conflict and criminality in the context of Indonesia’s expanding oil palm sector. Informed by original fieldwork, the article theorizes that violence will occur where there are choke points in a commodity’s production supply chain. Such choke points create the opportunity and incentive for armed groups—including “mafias,” youth gangs, landholders, and state security services—to compete for control of an industry’s rents. Analyses of multiple sources of violent conflict data at the individual, village, and subdistrict levels support our main hypothesis that violence has a nonlinear relationship with the extent of oil palm production. We also find that the effect of oil palm cultivation on conflict changes over time with prevailing commodity prices. Our results are robust to the use of reduced form analysis to account for the potential endogeneity of plantation expansion.