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

This paper examines the relationships between agrarian commodity booms and the incidence of group
con ict and criminality in the context of Indonesia's expanding oil palm sector. It theorizes that com-
modity boom violence takes two main forms: low level but organized criminal violence involved in the
extortion of \rents" produced by a given commodity extraction and production process (extortion); and
violent competition among a range of groups, including \maas", youth gangs, landholders, and commer-
cial producers for control of these rents (competition). Extortion and competition violence are associated
with distinct temporal distributions consistent with our theory. Criminality{especially theft{is higher
in villages with established and productive oil palm plantations (extortion), whereas villages undergoing
planation expansion have a higher incidence of group con ict (competition). Dynamic analyses utilizing
panel data at the sub-district level support our causal interpretation, as the relationship between the
area under oil palm cultivation and resource con ict (competition) changes over time and with prevailing
commodity prices. Our results are robust to the use of instrumental variable analysis to account for the
potential endogeneity of plantation expansion. Our theorized mechanism is given further support by a
targeted primary survey of 1,920 respondents in oil palm producing and non-producing villages, which
shows that villages experience dierent rates of extortion and competition violence depending both on if,
and when, oil palm production commenced.