Oilfields, Mosques and Violence: Is There a Resource Curse in Xinjiang?

How does natural resource extraction affect ethnic violence in a strong authoritarian state? This study investigates the effects of oil and natural gas development on violent incidents in Xinjiang, China, using data from its eighty-six counties. Contrary to the resource curse claim, we find that areas with larger quantities of resource production have lower rates of violence. The analysis of reserves data confirms that this finding is not driven by endogeneity between violence and resource production. This soothing effect of resources subsides, however, in areas with high mosque density. While we find no supporting evidence that drastic ethno-demographic changes or strengthening of public security are associated with resource extraction, the analysis shows that resource development contributes to improved local economic conditions, particularly with respect to employment and the incomes of employees of state-owned enterprises.