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Civil War Christopher Bla0man and Edward Miguel Journal of Economic Literature (2010) Biruk Terrefe ||| Lorena Zapata |||Jonah Joffe

Civil War - Development Economics

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Page 1: Civil War - Development Economics

Civil  War    Christopher  Bla0man  and  Edward  Miguel    Journal  of  Economic  Literature  (2010)  Biruk  Terrefe  |||  Lorena  Zapata  |||Jonah  Joffe  

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Distribu;on  of  Civil  War  

20%  of  na6ons  have  experienced  10  years  of  civil  war    

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Number  of  Conflicts  1990  peak  year    

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GDP  and  Civil  War  

Not  causal  symbio;c  rela;onship  

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Paradox  in  the  

Civil  War  is  central  to  the  

development  of  many  na6ons.  And  yet,  conflict  stands  at  the  periphery  of  economics  research  and  teaching.        Todaro’s  (1999)  textbook  does  not  contain  words  “war”,  ”conflict”,  or  “violence”  in  subject  index!    

study  of  conflict  

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Main  Arguments  

Exis6ng  Theory  on  causes  of  conflict    is  incomplete  and  remains  untested      

Need  for  systema;c  approach  in  

understanding  war’s  economic  

impact    

Christopher  Bla;man  and  Edward  Miguel  (2010)  

Single  most  promising  fron6er  

in  research:  applied  

microeconomic  analysis  in  conflict    

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Outline  1.   Theore;cal  Founda;ons  2.   Empirical  Evidence    3.   Economic  Consequences    4.   Conclusion    5.   Discussion    

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Theories  of  Armed  C    nflict    

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The  Contest  Model  

Central  Assump;on:    Insurrec6on  as  a  form  of  

compe66on  for  resources  between  two  par6es  (e.g.  rebel  group  vs.  

government)  

 The  winning  party  consumes  the  

resources  of  both  par6es  

             

Decision:    Produce  or  

appropriate  ?      

Both  par6es  behave  ra6onal  and  aim  to  maximize  their  

wealth                

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A  ra;onal  Decision:  Produc;on  vs.  Appropria;on  

U;lity  of  own  Produc;on  

       

 Input    =  Weaponry,  Soldiers    

 Output  =  probability  of  winning    and  appropria6ng  the  other  

party‘s    produc6on    

U;lity  of  Appropria;on  

Input  =  Labor,  Resources    

 Output  =  economic  produc6on    

Any  produc6on  func6on….  

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Limita;on  of  the  Contest  Model  

If  the  compe6ng  groups  are  ra6onal,  both  should  prefer  a  bargained  solu6on  to  destruc6ve  conflict.    

Why  do  wars  ever  occur  at  all?  

War  is  generally  costly,  destruc6ve  and  risky  

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Failure  of  Bargaining  

Asymmetric  Informa;on    e.g.  Strategic  incen6ve  to  misrepresent  own  strength  

(scare  other  party  to  prevent  insurrec6on)  

Commitment  Problems    A  future  shi[  in  power  distribu6on  gives  an  incen6ve  to  break  a  se\lement  promise  

 

Incomplete  Contrac;ng  Failure  of  the  agreed  

se\lement  due  to  lack    of  a  third  party  to  enforce  it  (Countries  with  weak  

ins6tu6ons)  

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Problems  with  Studying  War    

Non-­‐violent  alterna6ve  not  

existant    

Ideological  incen6ves  

 

Material  incen6ves  

Psychological  reasons:  

Frustra6on  and  Grievances  

 

Threat  of  Punishment  

Feeling  of  belonging  to  an  ethnical  group  

Complex  individual  

mo6va6ons  to  fight    

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Conduct  and  Organiza;on  of  Civil  War  

Models  &  Theories  try  to  explain  factors  that  influence  

structure  and  dynamics  of  a  group  

 Most  understudied  area  in  

theories  of  conflict!    

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Varying  Roots  of  Civil  War  

Ra;onal  War  §  Compe66on  for  

resources  §  Bargained  solu6ons  

occasionally  fail  

Irra;onal  War  §  Ideosyncra6c  factors    §  Single  circumstances  

Predictable  Irra;onal  War  §   Systema6c  errors  in  

decision-­‐making  by  leaders  

§  Other  determinants  outside  the  ra6onal  framework  

 

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Empirical  Evidence    

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Empirical  Causes  of  Conflict  Fearon  and  Lai;n  (2003)        Factors  that  favor  insurgency  Significant  §  Rough  terrain    §  Per  capita  income  –  (most  robust  

predictor)    Insignificant  §  Proxies  for  poli6cal  grievances  

have  li\le  predic6ve  power    

Collier  and  Hoeffler  (2004)      Factors  that  impact  conflict  incidence  Significant  §  Slow  Current  Economic  Growth  (+)  §  Natural  Resources  (+)  §  Secondary  School  Educa6on  (-­‐)  

 

Insignificant  §  Ethnic  frac6onaliza6on  §  Income  inequality    §  Democracy  

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5  Key  Differences  between  Studies  

1.  Threshold  of  violence  required  to  be  defined  as  civil  war  

2.  Different  defini6ons  of  war  beginnings  (onset  of  conflict  varies)  

3.  Treatment  of  interna6onalized  civil  war  (external  involvement)  

4.  Treatment  of  related  forms  of  conflict  (communal  violence  &  state  repression)  

5.  Underlying  data  sources  that  they  draw  from  are  different  

Differences  support  argument  that  micro-­‐level  data  is  likely  to  yield  more  convincing  results  

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Empirical  Advances    

1.  Search  for  exogeneity      

2.  Theore;cally  Mo;vated  Measurement    

§  Existence  of  fixed  effects    §  Rainfall  growth  rates  as  Instrumental  

variable  for  per  capita  income  (agricultural-­‐based  economies)    

§  IV  specifica6on  allows  finding  of  5%  drop  in  income  growth  increases  the  likelihood  of  a  civil  conflict  in  following  year  up  to  10%    

§  More  research  methods  necessary  to  dis6nguish  correla6on  from  causa6on  

 

§  Findings  should  be  more  consistent  with  the  contest  model’s  predic6on.    

§  Be\er  measurement  of  poli6cal  grievances,  ins6tu6onal  quality,  and  even  poverty    

§  The  cost  of  organizing  a  rebellion  is  simply  lower  within  ethnically  homogenous  groups.    

 

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Empirical  Advances  Pt.  2    

3.  Integra;on  of  Case  Studies    

4.  Beyond  Borders      

§  Case-­‐based  studies  provide  insights  into  peace  keeping  mission  effec6veness  (Doyle,  2006)  

§  Illustrates  possible  causal  mechanisms,  generate  new  hypotheses  for  tes6ng,  and  s6mulate  innova6ve  data  collec6on.    

§  Spillover  effects  of  civil  wars    §  Presence  of  trans-­‐boundary  ethnic  

groups  increases  conflict  risk    §  Ques6on  of  refugees  –  arms  

smuggling    §  Diasporas    §  Effects  of  Cold  War        

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Empirical  Advances  Pt.  3    

5.  Conflict  Dura;on  and  Termina;on    

6.  Typology  of  Conflict      

§  Short  Wars  –  coup  d'états,  popular  revolu6ons  

§  Long  –las;ng  wars  –  autonomy-­‐seeking  peripheral  region  insurgencies    

§  Ethnically  fragmented  and  polarized  countries  experience  longer  conflicts  (Sambanis,  2000)  

§  .    

§  Heterogeneity  of  types  of  civil  war  should  be  explicitly  incorporated  into  empirical  models  §  Iden6ty  vs.  non-­‐iden6ty  wars    §  Conven6onal  wars  §  Symmetric  nonconven6onal  wars  §  Symmetric  irregular  wars    §  Urban  wars  

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Remaining  Challenges  of  Empirical  Work  

Insufficient  a\en6on  to  measurement  issues  (research  needs  to  be  prepared  in  advance)    

Micro-­‐level  results  should  test  conflict  theories  (remains  to  be  seen)      

Causal  Iden6fica6on  via  small  number  of  exogenous  instrumental  variables  is  realis6c  

General  need  for  more  data  collec6on,  con6nued  searching  for  natural  experiments  

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Econ    mic  Consequences  

of  War  

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Economic  Legacy  of  Civil  Conflict  Output  declines  by  6%  in  immediate  a[ermath  of  civil  war  (Cerra  and  Saxena,  2008)    

In  Rwanda,  20%  of  the  popula;on  moved  into  poverty  following  the  genocide  (Jus6no  and  Verwimp,  2006)    

Technology  

Ins6tu6ons    

Physical  Capital    

Human  Capital/  Labor  

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Neo-­‐classical  models  of  growth    (with  human  capital)  

Imbalance  Effect  -­‐  Recovery  is  faster  in  asymmetric  destruc6on.  Rela6ve  degree  of  physical  and  human  capital  destruc6on  ma\ers.  (Barro,  2003)            

K   H  Iden;fica;on  problem  –  war-­‐torn  countries  are  different  than  peaceful  ones.    

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Physical  Capital  and  Investment  

Civil  War  causes  steepest  short-­‐run  fall  in  output  (6%),  but  also  has  fastest  recovery,  compared  to  financial  crisis,  currency  crisis,  banking  crisis  (Cerra  

and  Saxena  2008).    

The[  and  Destruc6on    

Capital  Flight  (Collier,  1999)  

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Physical  Capital  and  Investment  

Implica;on:  rapid  recovery  to  equilibrium  levels                (high  returns  and  rates  of  investment)      

Central  Assump;on:  Underlying  ins6tu6ons  and  technology  are  largely  unaffected                Capital  stock  returns  to  steady  state  level  once  figh6ng  stops        

Limita;on:  Poli6cal  and  economic  uncertainty  ignored  

Source:  Vance  (2013)  

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Labour          &        Human  Capital  

Malnutri;on  causes  lack  of  height,  which  affects  life6me  produc6vity  (Alderman  2006).    

Human  capital  levels  converged  rapidly  across  regions  a[er  war  in  Vietnam  (Miguel  and  Roland  2006)  

Children  whose  home  was  destroyed  are  less  likely  to  obtain  secondary  educa6on  (Shemyakina  2006).    

Subs6tute  of  figh6ng  =  less  schooling,  persistent  Injuries,  Psychological  trauma  and  community  rejec6on    

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War,  Ins;tu;ons  and  Society  

3.  Work  Ethics  2.  Ra6onal  Bureaucracy    

1.  Property  Rights  

Vic;miza;on  during  war  increases  poli6cal  par6cipa6on  (Bellows  and  Miguel,  2006)  Internal    

War  

Use  of  force  to  protect  authority  

State-­‐building  (Tilly,  1982)  

Illegi6macy  of  State  

Ins6tu6onal  disintegra6on    

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War,  Ins;tu;ons  and  Society  

civil  war  

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Conclusi    n  

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The  Way  Forward  1.  Rebel  organiza6on  and  decision  making  needs  to  be  inves6gated  

4.  Ideally:  Archive  pre-­‐war  survey,  track  down  sampled  household  and  conduct  of  follow-­‐up  postwar  survey  (avoiding  iden6fica6on  problem  through  microeconomic  approach  )  

2.  Improve  measures  of  poli6cal  awtudes  and  grievances  

3.  Development  of  data  on  addi6onal  forms  of  poli6cal  instability  and  violence  

5.  Increase  coopera6on  and  coordina6on  with  governments  and  interna6onal  organiza6ons  

Intellectual  Entrepreneurship  

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“Once  you  start  thinking  about  civil  war,  it’s  hard  to  think  about  anything  else.”  

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Discussion  Ques;ons    

Could  the  study  of  conflict  be  seen  as  the  most  trans-­‐disciplinary  field  in  social  sciences?  

Do  you  see  a  moral  hazard  or  an  “ethical  concern”  in  the  study  of  civil  war?    

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