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Economic shocks, civil war and ethnicity

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  • Janus, Thorsten
  • Riera-Crichton, Daniel

Abstract

Using a novel cross-country panel dataset, we show that commodity terms of trade declines cause civil war in countries with intermediate ethnic diversity. The civil war effects for highly diverse or homogenous societies are negative and insignificant. Since the size of the largest ethnic group explains 96% of the variation in the ethnic diversity measure, we conjecture that a key problem may be ethnic dominance: countries where the ethnic plurality is large, but not so large it cannot be challenged, may be most vulnerable to economic shocks. The findings may help to bridge the partly distinct literatures linking ethnicity and economic factors to conflict.

Suggested Citation

  • Janus, Thorsten & Riera-Crichton, Daniel, 2015. "Economic shocks, civil war and ethnicity," Journal of Development Economics, Elsevier, vol. 115(C), pages 32-44.
  • Handle: RePEc:eee:deveco:v:115:y:2015:i:c:p:32-44
    DOI: 10.1016/j.jdeveco.2015.01.003
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    Cited by:

    1. repec:eee:jpolmo:v:40:y:2018:i:5:p:959-997 is not listed on IDEAS
    2. Giménez Gómez, José M. (José Manuel), 2016. "Linking social heterogeneity and commodity price shocks to civil conflicts," Working Papers 2072/290744, Universitat Rovira i Virgili, Department of Economics.

    More about this item

    Keywords

    Civil war; Social conflict; Ethnicity; Ethnic diversity; Commodity terms of trade;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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