Why do poor countries suffer costly conflict? Unpacking per capita income and the onset of civil war

Empirical studies on the causes of civil war robustly show that poor countries are more likely to suffer civil war than rich ones. However, the interpretations of this finding differ. The literature proposes three different causal mechanisms: (1) poverty leads to grievances; (2) income proxies the opportunity-cost of rebelling; and (3) income proxies state capacity. Using factor analysis, logistic modeling and multiple imputation, we test which of the three possible explanations can best explain the link between poverty and conflict. We find per capita income to belong to a wealth/poverty dimension, and to have little in common with “pure†measures of grievance and state capacity. Thus our findings support the opportunity-cost argument. The wealth dimension is also shown to be the most important underlying cause of civil war.