Poverty and Violence : The Immediate Impact of Terrorist Attacks against Civilians in Somalia

Somalia, one of the poorest countries in Sub-Saharan Africa, still faces many challenges as itremains fragile. Terrorist groups and their attacks are threatening the government and limiting its capacity toimplement effective development policies. Using difference-in-difference and instrumental variablesapproaches with micro-data from two waves of the Somali High Frequency Survey, this paper estimates the immediate (withina week) impact of terrorist attacks on households. The consumption of households exposed to terrorist incidentsdecreases by 33 percent, mainly on food items. As a result, poverty and the depth of poverty among the poor increases.The decline in consumption seems to be explained by a smaller share of household members working and earningincome after an attack. In addition, the effect on consumption is restricted to a 4-kilometer radius fromincidents and has a heterogeneous impact, not affecting households in the top 20 percent of the consumptiondistribution. The paper also finds a deterioration in people’s perception of police competence. Achieving peace isa fundamental first step to increase welfare conditions that will also bring other wider long-term benefits in Somalia.