Since the 1970s, a curious phenomenon has emerged, suggesting that resource rich countries are "cursed" by their resources. Over the last couple of decades, researchers have argued that rentier countries are more likely to have educational underachievement, the Dutch disease, corruption, slower democratization, and conflict. Although current research has proven helpful and productive, some aspects still remain contested in both theoretical and empirical terms. This dissertation aims to fill certain lacunae in this literature. My dissertation examines how ordinary citizens turn into dissidents and then to rebels in rentier states. I build and test an innovative theoretical argument, which focuses on individuals' daily lives, and explains how policies by rentier governments discourage merit-based employment. This, in turn, yields a high level of grievance among segments of the population. I also develop a comprehensive theory that combines macro-level and micro-level explanations of conflict onset in rentier states. Finally, I analyze an important, but previously neglected aspect of civil wars in rentier states: conflict outcomes. I suggest that the existence of abundant natural resources would have a significant impact on conflict outcomes. Accordingly, government victory would be more likely, and negotiated settlement would be less likely in rentier countries compared to non-rentier countries.