For t=1,..., T. The income ratio curve (W(t)) is less than 1 for t>1 (Figure 5). The size of the area between the horizontal line W(0)=1 and the W(t) curve is equal to the total costs of the war divided by the per capita income in the initial period, which is equal to about $309 in 2000 fixed prices. Therefore, it is straightforward to estimate the total costs of the Sudanese war, which comes to $787 in per capita terms. This suggests that the more than 20 years long war have cost the country more than two and a half years worth of the annual GDP during (1975-79). Expressed in terms of total absolute costs, we estimate that the total dollar value in year 2000 USD is 23 billion. Finally, the same calculations also allow comparing the actual per capita income to the potential income under the counterfactual scenario of no civil war (Figure 6). Starting from an income per capita of $309 (in 2000 fixed prices), we estimate that, had it not been for the war, the Sudan would have realized an income per capita of $464 in 2002, compared to the actual income of $408.

The analysis of the costs of the Sudanese civil war contributes to a small literature on the indirect costs of internal conflicts. In a recent survey on the costs of armed conflictsprepared for the “International Task Force on Global Public Goods”- Elisabeth Skons (2004) identifies only four studies on internal conflicts (Brown and Rosecrance, 1999; Stewart and FitzGerald, 2001; Collier et al, 2003; and, Collier and Hoeffler, 2004b).<sup>34</sup> The first study was concerned with the costs of prevention of conflicts to external parties but not to the conflict-affected countries themselves, while the second and third studies discuss the analytical underpinnings and the channels through which internal civil wars can be costly. However, neither study attempts to systematically quantify the monetary costs of civil wars. On the other hand, the paper by Collier and Hoeffler uses an estimate of the growth effect of -2.2% (due to Collier, 1999) to compute the average costs of civil war for a war-affected country to be around 105% of initial GDP, which comes to about $21 b (in 1985 fixed prices).<sup>35</sup> Their aggregate estimate also includes other costs: loss of GDP to neighbors (115% of the conflict-affected country’s initial GDP); the costs due to the diversion of expenditure to the military for the country in question as well as well as for its neighbors (30% of GDP); and costs due to the health impact of conflicts (about $5b). This would

> 34 Skons’ review also includes two studies on the costs of the war in Iraq (Nordhaus, 2002; Bennis et al. 2004). The Iraq war is, however, a different type of conflict than the civil wars in low-income countries.

> 35 Collier and Hoeffler estimate the average GDP for conflict-affected low-income countries (excluding China and India) prior to civil war onset to be $19.7 (in 1985 fixed prices) and apply the cumulative -2.2% growth effect to this initial income for a period of 21 years, including seven years of conflicts and 14 years of postconflict.  The latter is their estimate of the average period a country takes to recover to its pre-conflict national income level.

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