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Impact of War on Country per Capita GDP: A Descriptive Analysis

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  • Sevastianova Daria

    (University of Southern Indiana)

Abstract

This paper provides evidence of the impact of intra- and interstate wars on country income. War data for 1970-2000 are obtained from the Correlates of War project and merged with national income data from the Penn World Table 6.1 and World Bank demographic data for 90 countries. The results show that no straightforward relationship exists between war and economic well-being, since war need not decrease GDP, and might in fact raise it. Civil war is found to generally reduce income (as in examples of Angola, Chad, or Congo), but in India war actually raised income. The effect of international war on the economy is more ambiguous: in Egypt, Iran, and Uganda, GDP per capita decreased during war time, but in Israel, Syria, and China, GDP per capita actually grew during war. The study also finds that negative effects of wars are stronger in the short run, and that low-growth countries engage in civil war, while high-growth countries fight international wars.

Suggested Citation

  • Sevastianova Daria, 2009. "Impact of War on Country per Capita GDP: A Descriptive Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 15(1), pages 1-28, December.
    • Handle: RePEc:bpj:pepspp:v:15:y:2009:i:1:n:7
    DOI: 10.2202/1554-8597.1168
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    3. Yamarik Steven J & Johnson Noel D & Compton Ryan A, 2010. "War! What Is It Good For? A Deep Determinants Analysis of the Cost of Interstate Conflict," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-35, September.
    4. Ecenur Ugurlu-Yildirim & Beyza Mina Ordu-Akkaya, 2022. "Does the impact of geopolitical risk reduce with the financial structure of an economy? A perspective from market vs. bank-based emerging economies," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(4), pages 681-703, December.
    5. Ulrich Eydam & Florian Leupold, 2023. "What is it good for? On the Inflationary Effects of Military Conflicts," CEPA Discussion Papers 65, Center for Economic Policy Analysis.
    6. Uk Heo & Min Ye, 2016. "Defense Spending and Economic Growth around the Globe: The Direct and Indirect Link," International Interactions, Taylor & Francis Journals, vol. 42(5), pages 774-796, October.

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