Does conflict disrupt growth? Evidence of the relationship between political instability and national economic performance
AbstractCurrent empirical growth models limit the determinants of country growth to geographic, economic, and institutional variables. This study draws on conflict variables from the Correlates of War (COW) project to ask a critical question: how do different types of conflict affect country growth rates? It finds that wars slow the economy. Estimates indicate that civil war reduces annual growth by 0.01--0.13 percentage points, and high-intensity inter-state conflict reduces annual growth by 0.18--2.77 percentage points. On the other hand, low-intensity conflict slows growth much less than high-intensity conflict, and may slightly increase it. The detrimental effect of conflict on growth is intensified when examining non-democracies, low-income countries, and countries in Africa.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 21 (2012)
Issue (Month): 3 (March)
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Web page: http://www.tandfonline.com/RJTE20
Other versions of this item:
- Polachek, Solomon & Sevastianova, Daria, 2010. "Does Conflict Disrupt Growth? Evidence of the Relationship between Political Instability and National Economic Performance," IZA Discussion Papers 4762, Institute for the Study of Labor (IZA).
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
- P47 - Economic Systems - - Other Economic Systems - - - Performance and Prospects
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
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