Abstract
The question over whether resource abundance or scarcity is an important cause of conflict has been a lively area of research. We examine this question in a simple trade-theoretic model where two regions are in conflict and where war equilibrium is determined endogenously. We find that while abundance of uncontested natural resources discourages conflict (the Malthusian view), abundance of contested natural resources encourages conflict. We also show that when the warring regions have influence over the terms of trade and take this influence into account when deciding war efforts, the effect of endowments on conflict may be strengthened or weakened depending on factor intensities of production and the relative strength of income and substitution effects.