Working Paper: CEPR ID: DP15349
Authors: Felipe Valencia Caicedo; Juan Felipe Riao
Abstract: As part of its Cold War counterinsurgency operations in Southeast Asia, the U.S. government conducted a “Secret War” in Laos from 1964-1973. This war constituted one of the most intensive bombing campaigns in human history. As a result, Laos is now severely contaminated with UXO (Unexploded Ordnance) and remains one of the poorest countries in the world. In this paper we document the negative long-term impact of conflict on economic development, using highly disaggregated and newly available data on bombing campaigns, satellite imageryand development outcomes. We find a negative, significant and economically meaningful impact of bombings on nighttime lights, expenditures and poverty rates. Almost 50 years after the conflict officially ended, bombed regions are poorer today and are growing at slower rates than unbombed areas. A one standard deviation increase in the total pounds of bombs dropped is associated with a 9.3%fall in GDP per capita. To deal with the potential endogeneity of bombing, we use as instruments the distance to the Vietnamese Ho Chi Minh Trail as well as US military airbases outside Laos. Using census data at the village and individual levels, we show the deleterious impact of UXOs in terms of health, as well as education, structural transformation and rural-urban migration.
Keywords: conflict; laos; cold war; uxo; development; growth; health; human capital; structural transformation; migration
JEL Codes: D74; N10; N15; O10; O53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bombing intensity (L94) | economic outcomes (F61) |
| bombed regions (H84) | poorer today (P46) |
| bombed regions (H84) | slower growth rates (O49) |
| bombing (H56) | lower educational attainment (I24) |
| bombing (H56) | lower employment probabilities (J68) |
| bombing (H56) | higher poverty rates (I32) |
| presence of unexploded ordnance (UXO) (Y50) | hampers health, education, and rural-urban migration (I25) |