Peace Under the Influence? The Role of Illicit Drug Economies in Peace Processes and Rebel Splintering

How do the economic foundations of rebel groups shape civil war dynamics? While prior research has explored how different resource types affect conflict, less is known about how the illicit nature of certain resources—particularly drug economies—affects peace processes. We argue that the inherent illegality of drug-based financing imposes structural barriers to peace, distinguishing it from other forms of rebel revenue. Using cross-national dyadic data from 1990 to 2011, we find that drug-reliant rebel groups have 34 percent lower hazard of initiatiating peace talks and over six times more likely to fragment once peace processes begin. These findings suggest that drug-based financing generates a self-reinforcing cycle that sustains violence. In contrast to accounts emphasizing grievances produced by peace processes, we show that some groups may be structurally predisposed to reject peace altogether. Our findings call for theoretical and policy approaches tailored to the distinct challenges posed by illicit drug economies.