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Economic Shocks and Conflict: The (Absence of?) Evidence from Commodity Price- Working Paper 274

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  • Samuel Bazzi, Christopher Blattman

Abstract

One of the most influential ideas in the study of political instability is that income shocks provoke conflict. “State prize” theories argue that higher revenues increase incentives to capture the state. “Opportunity cost” theories argue that higher prices decrease individual incen-tives to revolt. Both mechanisms are central to leading models of state development and collapse. But are they wellfounded? We examine the effects of exogenous commodity price shocks on conflict and coups, and find little evidence in favor of either theory. Evidence runs especially against the state as prize. We do find weak evidence that the intensity of fighting falls as prices rise—results more consistent with the idea that revenues augment state capacity, not prize-seeking or opportunity cost. Nevertheless, the evidence for any of these income-conflict mecha-nisms is weak at best. We argue that errors and publication bias have likely distorted the theoret-ical and empirical literature on political instability.

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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 274.

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Length: 52 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:cgd:wpaper:274

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Web page: http://www.cgdev.org

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Conflicts and Economic Development
    by Dany Jaimovich - Bakary Baludin in Development Therapy on 2013-03-04 14:32:00
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Cited by:
  1. Laurence Ales & Pricila Maziero & Pierre Yared, 2012. "A Theory of Political and Economic Cycles," NBER Working Papers 18354, National Bureau of Economic Research, Inc.
  2. Ihle, Rico & Rubin, Ofir D., 2013. "Consequences of unintended food policies: Food price dynamics subject to the Israeli–Palestinian conflict," Food Policy, Elsevier, vol. 42(C), pages 96-105.
  3. Jesse Tack & David Ubilava, 2013. "The effect of El Niño Southern Oscillation on U.S. corn production and downside risk," Climatic Change, Springer, vol. 121(4), pages 689-700, December.

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