Working Paper: CEPR ID: DP9895
Authors: Nicolas Berman; Mathieu Couttenier
Abstract: This paper uses detailed information on the latitude and longitude of conflict events in Sub-Saharan African countries to study the impact of external income shocks on the likelihood of violence. We consider a number of external demand shocks faced by the countries or the regions within countries - temporary shocks such as changes in the world demand for agricultural commodities, and longer-lasting events such as financial crises in the partner countries - and combine these with information reflecting the natural level of trade openness of the location. We find that (i) the incidence, intensity and onset of conflicts are generally negatively and significantly correlated with income variations at the local level; (ii) this relationship is significantly weaker for the most remote locations, i.e those located away from the main seaports, (iii) at the country-level, these shocks have an insignificant impact on the overall probability of conflict outbreak, but do affect the probability that conflicts start in the most opened regions. Altogether, our results therefore suggest that external income shocks are important determinants of the intensity and geography of conflicts, and provide support in favor of the opportunity cost theories of war.
Keywords: civil war; conflict; income shocks
JEL Codes: D74; F15; O13; Q17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| positive external income shocks (F41) | incidence of conflict (D74) |
| increased income due to external demand (F29) | conflict probability (D74) |
| trade openness (F43) | effects of income shocks on conflict probability (D74) |
| remoteness from trade routes (R12) | impact of income shocks (F61) |
| external income shocks (F41) | likelihood of conflict onset in opened regions (D74) |
| control variables (distance to capital city, borders, natural resources) (R12) | identified effects (Q51) |