Bidding for governance: rebel vs. state labor-retention strategies in conflicts

Abstract This article examines the competing bids of rebel organizations and state authorities over the rights to extract and market natural resources. It highlights the pivotal role of profit in establishing rebel governance and eliciting state responses, challenging traditional views that governance is solely legitimacy seeking and that resource profits inherently hinder governance. We introduce a novel framework categorizing natural resources based on their labor dependency, determined by levels of mechanization and stages of extraction. This framework highlights the economic battleground where rebels and states not only compete for resource profits but also strategize for control: one through the establishment of quasi-state institutions, and the other through concessions aimed at constituencies claimed by rebels. These strategies aim to incorporate and retain labor and outputs under their authority, asserting economic and regulatory advantages. Utilizing existing datasets on rebel governance and natural resource extraction, as well as a novel dataset on state concessions to rebel constituencies, the findings demonstrate that when rebel organizations profit from labor-dependent resources, it incentivizes both rebels and states to govern constituents. However, the extent of competition over resource control moderates the diversification of rebel and state strategies, as findings show that warring actors diversify their retention strategies only when they have a competitive advantage. Our findings demonstrate how the socioeconomic context influences the behavior of rebel organizations and states, as well as their engagement with civilian populations.