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The Cost of Fear: The Welfare Effects of the Risk of Violence in Northern Uganda

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  • Marc Rockmore

    ()
    (Cornell University)

Abstract

The micro-conflict literature focuses almost exclusively on direct exposure to violence and post-conflict outcomes. By focusing only on directly exposed households, the literature ignores the effects of risk on households in surrounding areas. This paper presents the first estimates of the economic costs of the risk of violence separate from the costs of the actual experience of violence, and finds that it is a significant mechanism by which conflict influences development. Using representative community and household data from Northern Uganda, I estimate measures of objective and subjective risk using geo-spatial variation in the distribution of violence over time. On average, the risk of violence lowers per capita household expenditure by 2 to 6 percent. Even within households that are attacked, risk alone accounts for a significant share, between 17 and 38 percent, of their losses. On aggregate, half of conflict-related losses are due to risk as opposed to direct exposure to violence, with much of these risk-related losses in households that are not directly attacked. Compounding these losses over the duration of the conflict, the risk of violence has reduced per capita expenditure in the affected region by roughly 70 percent and national GDP by 4.6 to 8.2 percent. Lastly, I find that food aid reduces risk-related losses by 17 to 30 percent.

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Bibliographic Info

Paper provided by Households in Conflict Network in its series HiCN Working Papers with number 109.

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Length: 41 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:hic:wpaper:109

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  1. Akresh, Richard & de Walque, Damien, 2008. "Armed Conflict and Schooling: Evidence from the 1994 Rwandan Genocide," IZA Discussion Papers 3516, Institute for the Study of Labor (IZA).
  2. Marijke Verpoorten & Lode Berlage, 2007. "Economic Mobility in Rural Rwanda: A Study of the Effects of War and Genocide at the Household Level," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 16(3), pages 349-392, June.
  3. Asaf Zussman & Noam Zussman, 2006. "Assassinations: Evaluating the Effectiveness of an Israeli Counterterrorism Policy Using Stock Market Data," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 20(2), pages 193-206, Spring.
  4. Asaf Zussman & Noam Zussman & Morten Orregaard Nielsen, 2008. "Asset Market Perspectives on the Israeli-Palestinian Conflict," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 75(297), pages 84-115, 02.
  5. Collins, William J. & Margo, Robert A., 2007. "The Economic Aftermath of the 1960s Riots in American Cities: Evidence from Property Values," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 67(04), pages 849-883, December.
  6. Guidolin, Massimo & La Ferrara, Eliana, 2004. "Diamonds are Forever, Wars are Not: Is Conflict Bad for Private Firms?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4668, C.E.P.R. Discussion Papers.
  7. McKay, Andrew & Loveridge, Scott, 2005. "Exploring The Paradox Of Rwandan Agricultural Household Income And Nutritional Outcomes In 1990 And 2000," Staff Papers, Michigan State University, Department of Agricultural, Food, and Resource Economics 11582, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  8. Abdulai, Awudu & Barrett, Christopher B. & Hoddinott, John, 2005. "Does food aid Really have disincentive effects? New evidence from sub-Saharan Africa," World Development, Elsevier, Elsevier, vol. 33(10), pages 1689-1704, October.
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Cited by:
  1. Ana María Ibañez Londoño & Juan Carlos Muñoz Mora & Philip Verwimp, 2013. "Abandoning Coffee under the Threat of Violence and the Presence of Illicit Crops. Evidence from Colombia," HiCN Working Papers, Households in Conflict Network 150, Households in Conflict Network.
  2. James Fenske & Achyuta Adhvaryu, 2013. "War, Resilience and Political Engagement in Africa," Economics Series Working Papers, University of Oxford, Department of Economics WPS/2013-08, University of Oxford, Department of Economics.
  3. Achyuta Adhvaryu & James Fenske, 2014. "Conflict and the Formation of Political Beliefs in Africa," HiCN Working Papers, Households in Conflict Network 164, Households in Conflict Network.
  4. María Alejandra Arias & Ana María Ibáñez & Andrés Zambrano, 2014. "Agricultural Production Amid Conflict: The Effects of Shocks, Uncertainty, and Governance of Non-State Armed Actors," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 011005, UNIVERSIDAD DE LOS ANDES-CEDE.

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