Nber Working Paper Series Civil War

Most nations have experienced an internal armed conflict since 1960. The past decade has witnessed an explosion of research into the causes and consequences of civil wars, belatedly bringing the topic into the economics mainstream. This article critically reviews this interdisciplinary literature and charts productive paths forward. Formal theory has focused on a central puzzle: why do civil wars occur at all when, given the high costs of war, groups have every incentive to reach an agreement that avoids fighting? Explanations have focused on information asymmetries and the inability to sign binding contracts in the absence of the rule of law. Economic theory has made less progress, however, on the thornier (but equally important) problems of why armed groups form and cohere, and why individuals decide to fight. Likewise, the actual behavior of armed organizations and their leaders is poorly understood. On the empirical side, a vast cross-country econometric literature has aimed to identify the causes of civil war. While most work is plagued by econometric identification problems, low per capita incomes, slow economic growth and geographic conditions favoring insurgency are the factors most robustly linked to civil war. We argue that microlevel analysis and data are needed to truly decipher war’s causes, and understand the recruitment, organization, and conduct of armed groups. Recent advances in this area are highlighted. Finally, turning to the economic legacies of war, we frame the literature in terms of neoclassical economic growth theory. Emerging stylized facts include the ability of some economies to experience rapid macroeconomic recoveries, while certain human capital impacts appear more persistent. Yet econometric identification has not been adequately addressed, and there is little consensus on the most effective policies to avert conflicts or promote postwar recovery. The evidence is weakest where it is arguably most important: in understanding civil wars’ effects on institutions, technology, and social norms. Christopher Blattman Departments of Political Science and Economics Yale University 77 Prospect St New Haven, CT 06520-8301 christopher.blattman@yale.edu Edward Miguel Department of Economics University of California, Berkeley 508-1 Evans Hall #3880 Berkeley, CA 94720 and NBER emiguel@econ.berkeley. edu 2 1 Civil war and the study of economics Internal civil conflict has been commonplace during the past half-century, a fact that, until recently, escaped the notice of most economists. Civil wars, or those internal conflicts that count more than 1,000 battle deaths in a single year, have afflicted a third of all nations. Counting civil conflicts, or those that count at least 25 battle deaths per annum, increases the incidence to more than half. This internal warfare is not just extremely common, it is also persistent. Figure 1 displays the cumulative proportion of all nations experiencing wars and conflicts since 1960. Twenty percent of nations have experienced at least 10 years of civil war during the period. The proportion of countries embroiled in civil conflict at a single point in time increased steadily through the last half of the 20 century, peaking in the 1990s at over 20% (see Figure 2). In sub-Saharan Africa, the world’s poorest region, nearly a third of countries had active civil wars or conflicts during the mid-1990s. The prevalence of war prompted scholars to ask a simple question: why there is so much civil war in the world? A decade later, observers began to ask where some of the civil wars had gone; there were “just” 32 active conflicts in 2006, the result of a steady decline in conflict from a peak of 51 in 1992. The outbreak of internal wars is commonly attributed by 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 literature. Figure 3 illustrates the relationship between per capita 3 These definitions come from the well-known UCDP/PRIO dataset developed by Gleditsch, Wallensteen, Eriksson, Sollenberg, and Strand (2002) and extended in Harbom and Wallensteen (2007). UCDP/PRIO defines conflict as “a contested incompatibility that concerns government and/or territory where the use of armed force between two parties, of which at least one is the government of a state, results in at least 25 battle-related deaths. ” As noted below, the definition and coding of civil war is contested, but our main points are robust to alternative approaches. 4 The proportion of individuals directly affected by war violence is lower than suggested by this figure, as many armed conflicts are confined to sub-regions. Yet even individuals living in largely peaceful regions can be adversely affected by insecurity, the public policy changes, and economic consequences of a civil war. 3 income (percentiles) and civil war using a non-parametric Fan regression; countries towards the bottom of the world income distribution – many in Africa – have several times more wars than those in the top quartile, while middle income countries still face considerable conflict risk. Yet claims of a direct causal line from poverty to conflict should be greeted with caution. One reason is that this line can be drawn in reverse. Conflicts devastate life, health, and living standards. A chilling example is 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 (Coghlan, Ngoy, Mulumba, et al. 2007). Although the accuracy of mortality figures in such war zones is open to question, estimated mortality figures for Rwanda, Angola, and Sudan are likewise shocking. Massive loss of life inevitably affects the economy. Warfare also destroys physical infrastructure 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 conflict zones. Some have argued that the destructive consequences of internal warfare may be so great as to potentially be a factor in the growing income gap between the world’s richest and poorest nations (Collier, Elliot, Hegre, et al. 2003). 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 interstate wars and wars of territorial conquest served a critical role in enabling the development of strong and capable government institutions in Europe (e.g. Acemoglu and Robinson 2006; Ferguson 2002; Tilly 1975; Tilly 1992). The evidence on institution-building and internal warfare is limited, but cases of stronger states emerging out of contemporary civil wars also exist in East 4 Africa and Southeast Asia (Slater 2005; Weinstein 2005a). It seems clear to us that civil war ought to be central in the study of international economic development. Yet leading development economists have too often overlooked it; for instance, two respected and widely taught undergraduate development economics textbooks (Ray 1998; Todaro 1999) do not contain the words “war”, “conflict” or “violence” in their subject index. Moreover, a 2007 survey (by the authors) of 63 development economics course syllabi in leading U.S. universities reveals that only 13% of undergraduate courses and 24% of graduate courses mention any of these topics at all. 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. This article’s main goal is to summarize this progress and help chart a productive path forward. As befits an emerging field, this article focuses as much on what we cannot say today as what we know. Unfortunately, our survey deals too briefly with important topics such as civil war endings and duration, post-war reconstruction, and the emergence of peaceable institutions, in part because these sub-literatures are still largely in flux. We must also neglect related forms of violence – interstate war, terrorism, coups, communal violence, political repression and crime – to keep this article a reasonable length. This is a pity because the distinction between civil wars and other forms of political instability has largely been assumed rather than demonstrated. 5 The survey included 38 undergraduate and 25 graduate syllabi. We searched for online syllabi for undergraduate institutions ranked in the top 50 of the U.S. News and World Report college rankings (2007a), and for Ph.D. economics programs ranked in the top 25 of either the National Research Council (1995), Chronicle of Higher Education (2007), or U.S. News and World Report economics PhD (2007b) ranking. Details are available upon request. 6 Related literatures investigate the logic and organization of terrorism, including: self-selection and screening of terrorist recruits (Bueno de Mesquita 2005); why radical religious clubs specialize in suicide attacks (Berman and Laitin 2008); how terrorist organizations use bureaucracy to align the asymmetric preferences for violence among leaders and operatives (Shapiro 2008); the economic logic of hostage-taking and government response (Sandler and Enders 2004); the splintering and ideology of terrorist groups (Bueno de Mesquita 2007); the logic of suicide missions (Gambetta 2005); and why terrorists employ roadside bombs (Hanson 2008). The line between rebel and ter5 Our principal conclusions challenge researchers to focus on new questions, econometric methods, and data. First, beginning with the origins of conflict, we argue that existin