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 .01 to .13 percentage points, and high-intensity interstate conflict reduces annual growth by .18 to 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 InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4762.
Length: 51 pages
Date of creation: Feb 2010
Date of revision:
Publication status: published in: Journal of International Trade and Economic Development, 2011, [iFirst]
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Other versions of this item:
- Solomon W. Polachek & Daria Sevastianova, 2012. "Does conflict disrupt growth? Evidence of the relationship between political instability and national economic performance," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 21(3), pages 361-388, March.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-06 (All new papers)
- NEP-FDG-2010-03-06 (Financial Development & Growth)
- NEP-LAM-2010-03-06 (Central & South America)
- NEP-POL-2010-03-06 (Positive Political Economics)
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