Economic Shocks, Weather, and Civil War

Civil War and Economic Development Internal civil conflict has been common during the past half century, a fact that until recently escaped the notice of most economists. (1) Civil wars--internal conflicts with more than 1,000 battle deaths in a single year--have afflicted one third of all nations. Adding in civil conflicts, which involve at least 25 battle deaths per year, increases the incidence figure to more than half. (2) And, internal warfare is not just extremely common, it is also persistent. Figure 1 presents the cumulative proportion of all nations experiencing wars and conflicts since 1960: 20 percent of nations have experienced at least ten years of civil war during the period. The proportion of countries embroiled in civil conflict at a single point in time also has increased steadily through the last half of the twentieth century, peaking at over 20 percent in the 1990s. In sub-Saharan Africa, the world's poorest region, nearly a third of countries experienced active civil wars or conflicts during the mid-1990s. But why is this so? The outbreak of internal wars is commonly attributed to poverty. Indeed, the correlation between low per capita incomes and higher propensities for internal war is one of the most robust empirical relationships in the economic literature. Figure 2 illustrates the relationship between per capita income (percentiles) and civil war using a non-parametric Fan regression; the countries towards the bottom of the world's income distribution--many in Africa--have several times more wars than those in the top quartile, while the middle income countries still face considerable conflict risk. Still, we should be cautious about inferring a direct causal link from poverty to conflict because the reverse is also true: conflicts devastate life, health, and living standards. The Democratic Republic of Congo, where surveys suggest millions may have died as a result of the recent civil war, primarily due to hunger and disease, is a chilling example (3). Although the accuracy of mortality figures in such war zones is open to question, the estimated mortality figures for Rwanda, Angola, and Sudan are likewise shocking. Massive loss of life inevitably affects the economy. Warfare also destroys physical infra-structure and human capital, as well as possibly altering some social and political institutions. Moreover, internal wars are contagious; refugee flows, disease, lawlessness, and the illicit trades in drugs, arms, and minerals have generated spillover effects into the countries neighboring the conflict zones. [FIGURE 1 OMITTED] [FIGURE 2 OMITTED] A seeming paradox, however, is that warfare is also sometimes credited for the technological and institutional development that underpins Western economic prosperity. Both internal and external wars are commonplace in European history. Several scholars have claimed that inter-state wars and wars of territorial conquest served a critical role in enabling the development of strong and capable government institutions in Europe and Asia (4). Civil war is clearly central in the study of international economic development, yet leading development economists have often overlooked it, and some undergraduate textbooks do not even mention the issue. Over the past decade, however, many economists and other social scientists have worked to better understand the causes and the economic legacies of internal warfare, often in collaboration with political scientists and other scholars. The main goal of this research summary is to describe some of this progress, with a particular focus on the role of economic shocks, weather, and climate in driving the patterns laid out above. Cross-Country Evidence on the Causes of Armed Conflict The correlation between civil conflict and low income levels and negative income shocks is clear, but the direction of causality remains contested. …