1 / 30

Economic shocks and civil conflict

Economic shocks and civil conflict. -- based on “Transitory Economic Shocks and Civil Conflict” by Ciccone -- “Democracy, Growth, and Civil War” by Brückner&Ciccone. This presentation and the literature. aim to contribute to literature on economic shocks and civil conflict specifically:.

josie
Download Presentation

Economic shocks and civil conflict

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Economic shocks and civil conflict -- based on “Transitory Economic Shocks and Civil Conflict” by Ciccone -- “Democracy, Growth, and Civil War” by Brückner&Ciccone

  2. This presentation and the literature • aim to contribute to literature on economic shocks and civil conflict • specifically: (1) rainfall shocks and civil conflict/war in Sub-Saharan Africa? (2) commodity price shocks and civil conflict/war in SSA?

  3. (1) Rainfall shocks and civil conflict/war • Existing evidence: (rainfall growth) conflict/war onset and incidence (see Miguel et al “Economic Shocks and Civil Conflict: An Instrumental-Variables Approach,” JPE 2004) • Result: (low growth)(high conflict probability) But rainfall shocks are transitory and low rainfall growth may therefore be due to: -- negative rainfall shock -- mean reversion after positive rainfall shock

  4. Transitory positive shock at t=1(e.g. rainfall shock) negative growth conflict onset? 0 1 2 3 4 time YES…but then conflict may follow positive, not negative shocks!

  5. Civil conflict onset and transitory shocks Level specification Probability(Onsetct) =act+b*logRainfallct+c*logRainfallct-1 Growth specification Probability(Onsetct) =act+b*(logRainfallct-logRainfallct-1) caution: rainfall growth may be low because of a negative rainfall shock or mean-reversion following a positive rainfall shock

  6. Latest PRIO conflict data • (i) same period as before (1981-1999) • (ii) longest possible period (1981-2006)

  7. Civil war? No reduced form effect of rainfall shocks on civil war onset

  8. Instrumental variables approach • Use rainfall as instrument for deviation of income per capita from trend

  9. (First stage)

  10. (Second stage)

  11. (2) Commodity prices and civil conflict/war? • The timing of civil wars in Uganda, Rwanda, and Burundi appear to be related to fall in price of coffee, their biggest export • Is there evidence of a more generalized link between commodity export prices and civil conflict/war? • Can commodity price fluctuations be used to estimate the effects of economic growth shocks on civil conflict/war?

  12. Permanent positive shock at t=1(e.g. natural resource prices) 0 1 2 3 4 time

  13. Civil conflict onset and permanent shocks Level specification Probability(Onsetct) =act+b*logPricect+c*logPricect-1 Growth specification Probability(Onsetct) =act+b*(logPricect-logPricect-1) caution: price series may be non-stationary

  14. International Commodity Price Index • AGRICULTURAL COMMODITIES: bananas, cocoa, coffee, cotton, fish, groundnuts, livestock, sugar, tea, tobacco, wood. • NATURAL RESOURCES: aluminium, copper, gold, iron, nickel, oil, phosphates, uranium. • Sources: Deaton, 1999 JEP, UN ComTrade, IMF

  15. (3-year average)

  16. Instrumental variables approach • Use commodity price growth as instrument for economic growth

  17. (First stage) (3-year average)

  18. (Second stage)

  19. Civil conflict? No reduced form effect of commodity prices shocks on civil conflict onset

  20. Robustness • excluding large commodity suppliers (more than 3% of world supply) • agricultural vis-à-vis natural resource commodities

  21. Heterogenous effects • high versus low initial income • democracies versus autocracies

  22. (Reduced form)

  23. 11 (Reduced form) (F&PF versus NF)

  24. 12 (Reduced form)

  25. Conclusions Civil war Permanent negative shocks (commodity prices) Civil conflict Transitory negative shocks (rainfall)

  26. Supplementary Table (First stage)

More Related