Abstract
Oil palm is one of the most important commercial crops in the world, providing a living for some seven million smallholders globally. The exponential growth of the palm oil industry in response to increasing demand in recent decades has brought significant economic benefits. However, it has been argued that it also sparked numerous socio-environmental challenges that include a surge in civil conflict due to disputes over land and profit-sharing. This paper uses high-resolution remote-sensed data on the extent of palm oil plantations to estimate their effect on civil conflict in Indonesia, the world’s largest producer of palm oil. Our results indicate that a 1 percentage point increase in a sub-district’s palm oil area increases the number of violent conflict events by 1.6%. We examine the various dimensions of conflict associated with palm oil expansion by estimating its heterogeneous effects on different types of conflicts. The results of this paper contribute to a deeper understanding of the social impacts of palm oil expansion, which is needed to design policies and industry practices that foster sustainable and equitable development pathways.