Civil Wars and International Trade
AbstractThis paper analyzes empirically the relationship between civil wars and international trade. We first show that trade destruction due to civil wars is very large and persistent and increases with the severity of the conflict. We then test the presence of two effects that trade can have on the risk of civil conflicts: it may act as a deterrent if trade gains are put at risk during civil wars but it may also act as an insurance if international trade provides a substitute to internal trade during civil wars. We find support for the presence of these two mechanisms and conclude that trade openness may deter the most severe civil wars (those that destroy the largest amount of trade) but may increase the risk of lower scale conflicts.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6659.
Date of creation: Jan 2008
Date of revision:
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Other versions of this item:
- F10 - International Economics - - Trade - - - General
- F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
- F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-12 (All new papers)
- NEP-HIS-2008-04-12 (Business, Economic & Financial History)
- NEP-INT-2008-04-12 (International Trade)
- NEP-POL-2008-04-12 (Positive Political Economics)
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