IDEAS home Printed from https://ideas.repec.org/a/sae/compsc/v39y2022i4p394-421.html
   My bibliography  Save this article

Economic legacy effects of armed conflict: Insights from the civil war in Aceh, Indonesia

Author

Listed:
  • Martin Philipp Heger

    (The World Bank, USA)

  • Eric Neumayer

    (London School of Economics, UK)

Abstract

The province of Aceh in Indonesia provides a promising case for studying the economic legacy effects of conflict given subnational district-level data on violence and gross domestic product. We demonstrate specific negative economic legacy effects of armed conflict despite a general peace dividend: whilst all districts in Aceh grow faster after conflict ends in 2005 than during the conflict, the districts that suffered relatively more from violence during the war grow relatively more slowly during peacetime than districts that experienced relatively little violence. These negative legacy effects are relatively short-lived, however, and are no longer statistically significant from 2009 onwards. JEL classification: O40, O47, Q54

Suggested Citation

  • Martin Philipp Heger & Eric Neumayer, 2022. "Economic legacy effects of armed conflict: Insights from the civil war in Aceh, Indonesia," Conflict Management and Peace Science, Peace Science Society (International), vol. 39(4), pages 394-421, July.
    • Handle: RePEc:sae:compsc:v:39:y:2022:i:4:p:394-421
    DOI: 10.1177/0738894221994503
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0738894221994503
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0738894221994503?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Siyan Chen & Norman V. Loayza & Marta Reynal-Querol, 2008. "The Aftermath of Civil War," The World Bank Economic Review, World Bank, vol. 22(1), pages 63-85, February.
    2. Vincenzo BoveBy & Leandro Elia & Ron P Smith, 2017. "On the heterogeneous consequences of civil war," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 550-568.
    3. Pieter Serneels & Marijke Verpoorten, 2015. "The Impact of Armed Conflict on Economic Performance," Journal of Conflict Resolution, Peace Science Society (International), vol. 59(4), pages 555-592, June.
    4. Harold Alderman & John Hoddinott & Bill Kinsey, 2006. "Long term consequences of early childhood malnutrition," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 450-474, July.
    5. Christine Valente, 2014. "Education and Civil Conflict in Nepal," The World Bank Economic Review, World Bank, vol. 28(2), pages 354-383.
    6. Hannes Mueller, 2016. "Growth and Violence: Argument for a Per Capita Measure of Civil War," Economica, London School of Economics and Political Science, vol. 83(331), pages 473-497, July.
    7. Stefano Costalli & Luigi Moretti & Costantino Pischedda, 2017. "The economic costs of civil war," Journal of Peace Research, Peace Research Institute Oslo, vol. 54(1), pages 80-98, January.
    8. Arunatilake, Nisha & Jayasuriya, Sisira & Kelegama, Saman, 2001. "The Economic Cost of the War in Sri Lanka," World Development, Elsevier, vol. 29(9), pages 1483-1500, September.
    9. Michael J. Gilligan & Benjamin J. Pasquale & Cyrus Samii, 2014. "Civil War and Social Cohesion: Lab‐in‐the‐Field Evidence from Nepal," American Journal of Political Science, John Wiley & Sons, vol. 58(3), pages 604-619, July.
    10. Valerie Cerra & Sweta Chaman Saxena, 2008. "Growth Dynamics: The Myth of Economic Recovery," American Economic Review, American Economic Association, vol. 98(1), pages 439-457, March.
    11. Sharon Maccini & Dean Yang, 2009. "Under the Weather: Health, Schooling, and Economic Consequences of Early-Life Rainfall," American Economic Review, American Economic Association, vol. 99(3), pages 1006-1026, June.
    12. De Juan, Alexander & Pierskalla, Jan & Schwarz, Elisa, 2020. "Natural disasters, aid distribution, and social conflict – Micro-level evidence from the 2015 earthquake in Nepal," World Development, Elsevier, vol. 126(C).
    13. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    14. Bertoni, Eleonora & Di Maio, Michele & Molini, Vasco & Nisticò, Roberto, 2019. "Education is forbidden: The effect of the Boko Haram conflict on education in North-East Nigeria," Journal of Development Economics, Elsevier, vol. 141(C).
    15. James C. Murdoch & Todd Sandler, 2004. "Civil Wars and Economic Growth: Spatial Dispersion," American Journal of Political Science, John Wiley & Sons, vol. 48(1), pages 138-151, January.
    16. Stefano Costalli & Luigi Moretti & Costantino Pischedda, 2014. "The Economic Costs of Civil War: Synthetic Counterfactual Evidence and the Effects of Ethnic Fractionalization," HiCN Working Papers 184, Households in Conflict Network.
    17. World Bank, 2009. "Aceh Growth Diagnostic : Identifying the Binding Constraints to Growth in a Post-Conflict and Post-Disaster Environment," World Bank Publications - Reports 18893, The World Bank Group.
    18. Richard Akresh & Sonia Bhalotra & Marinella Leone & Una Osili, 2023. "First- and Second-Generation Impacts of the Biafran War," Journal of Human Resources, University of Wisconsin Press, vol. 58(2), pages 488-531.
    19. Sharma, Kishor, 2006. "The political economy of civil war in Nepal," World Development, Elsevier, vol. 34(7), pages 1237-1253, July.
    20. J. Vernon Henderson & Yong Suk Lee, 2015. "Organization of Disaster Aid Delivery: Spending Your Donations," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 617-664.
    21. Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, December.
    22. Samuel Bazzi & Christopher Blattman, 2014. "Economic Shocks and Conflict: Evidence from Commodity Prices," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 1-38, October.
    23. Mansour, Hani & Rees, Daniel I., 2012. "Armed conflict and birth weight: Evidence from the al-Aqsa Intifada," Journal of Development Economics, Elsevier, vol. 99(1), pages 190-199.
    24. Keith Hartley & Todd Sandler (ed.), 2007. "Handbook of Defense Economics," Handbook of Defense Economics, Elsevier, edition 1, volume 2, number 1.
    25. Subedi, Dambaru B., 2014. "Conflict, Combatants, and Cash: Economic Reintegration and Livelihoods of Ex-combatants in Nepal," World Development, Elsevier, vol. 59(C), pages 238-250.
    26. Philip Verwimp & Tom Bundervoet & Richard Akresh, 2010. "The Impact of Violent Conflict on Child Health: What Are the Channels?," Policy Briefings 6, MICROCON - A Micro Level Analysis of Violent Conflict.
    27. Chamarbagwala, Rubiana & Morán, Hilcías E., 2011. "The human capital consequences of civil war: Evidence from Guatemala," Journal of Development Economics, Elsevier, vol. 94(1), pages 41-61, January.
    28. Mathias Czaika & Krisztina Kis-Katos, 2009. "Civil Conflict and Displacement: Village-Level Determinants of Forced Migration in Aceh," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(3), pages 399-418, May.
    29. Heger, Martin Philipp & Neumayer, Eric, 2019. "The impact of the Indian Ocean tsunami on Aceh’s long-term economic growth," Journal of Development Economics, Elsevier, vol. 141(C).
    30. Patricia Justino, 2011. "Violent Conflict and Human Capital Accumulation," HiCN Working Papers 99, Households in Conflict Network.
    31. Akbulut-Yuksel, Mevlude, 2017. "War during childhood: The long run effects of warfare on health," Journal of Health Economics, Elsevier, vol. 53(C), pages 117-130.
    32. Paul Collier & Marguerite Duponchel, 2013. "The Economic Legacy of Civil War," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(1), pages 65-88, February.
    33. Ibrahim A. Elbadawi & Linda Kaltani & Klaus Schmidt-Hebbel, 2008. "Foreign Aid, the Real Exchange Rate, and Economic Growth in the Aftermath of Civil Wars," The World Bank Economic Review, World Bank, vol. 22(1), pages 113-140, February.
    34. Gomes, Joseph Flavian, 2015. "The Political Economy of the Maoist Conflict in India: An Empirical Analysis," World Development, Elsevier, vol. 68(C), pages 96-123.
    35. Miguel, Edward & Roland, Gérard, 2011. "The long-run impact of bombing Vietnam," Journal of Development Economics, Elsevier, vol. 96(1), pages 1-15, September.
    36. Doocy, S. & Gorokhovich, Y. & Burnham, G. & Balk, D. & Robinson, C., 2007. "Tsunami mortality estimates and vulnerability mapping in Aceh, Indonesia," American Journal of Public Health, American Public Health Association, vol. 97(S1), pages 146-151.
    37. Paul Collier & Anke Hoeffler, 2002. "AID, Policy and Peace: Reducing the risks of civil conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(6), pages 435-450.
    38. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    39. Roland Hodler, 2019. "The Economic Effects of Genocide: Evidence from Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 28(1), pages 1-17.
    40. Hannes Mueller, 2012. "Growth Dynamics: The Myth of Economic Recovery: Comment," American Economic Review, American Economic Association, vol. 102(7), pages 3774-3777, December.
    41. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hönig, Tillman, 2017. "The Impact of Peace: Evidence from Nigeria," MPRA Paper 83302, University Library of Munich, Germany.
    2. Olaf J de Groot & Carlos Bozzoli & Anousheh Alamir & Tilman Brück, 2022. "The global economic burden of violent conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 59(2), pages 259-276, March.
    3. Dominic Rohner & Mathias Thoenig, 2021. "The Elusive Peace Dividend of Development Policy: From War Traps to Macro Complementarities," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 111-131, August.
    4. Tillman Hönig, 2019. "The Impact of Peace: Evidence from Nigeria," HiCN Working Papers 293, Households in Conflict Network.
    5. Odozi, John Chiwuzulum & Oyelere, Ruth Uwaifo, 2019. "Conflict Exposure and Economic Welfare in Nigeria," GLO Discussion Paper Series 334, Global Labor Organization (GLO).
    6. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    7. Serneels , Pieter & Verpoorten , Marijke, 2012. "The impact of armed conflict on economic performance. Evidence from Rwanda," NEPS Working Papers 5/2012, Network of European Peace Scientists.
    8. Bharati, Tushar, 2022. "The long shadow of the Kargil War: The effect of early-life stress on education," Economics & Human Biology, Elsevier, vol. 44(C).
    9. Unfried, Kerstin & Ibañez Diaz, Marcela & Restrepo-Plazaz, Lina Maria, 2022. "Discrimination in post-conflict settings: Experimental evidence from Colombia," World Development, Elsevier, vol. 154(C).
    10. Akresh, Richard & Caruso, German Daniel & Thirumurthy, Harsha, 2022. "Detailed geographic information, conflict exposure, and health impacts," World Development, Elsevier, vol. 155(C).
    11. Minoiu, Camelia & Shemyakina, Olga N., 2014. "Armed conflict, household victimization, and child health in Côte d'Ivoire," Journal of Development Economics, Elsevier, vol. 108(C), pages 237-255.
    12. Minoiu, Camelia & Shemyakina, Olga N., 2014. "Armed conflict, household victimization, and child health in Côte d'Ivoire," Journal of Development Economics, Elsevier, vol. 108(C), pages 237-255.
    13. Dominic Rohner, 2022. "Conflict, Civil Wars and Human Development," Cahiers de Recherches Economiques du Département d'économie 22.08, Université de Lausanne, Faculté des HEC, Département d’économie.
    14. Tushar Bharati, 2021. "The Long Shadow of the Kargil War: The Effect of Early-life Stress on Education," HiCN Working Papers 347, Households in Conflict Network.
    15. Kerstin Unfried & Krisztina Kis-Katos, 2023. "The heterogeneous effects of conflict on education: A spatial analysis in Sub-Saharan Africa," Journal of Peace Research, Peace Research Institute Oslo, vol. 60(6), pages 968-984, November.
    16. Abay,Kibrom A. & Hirfrfot,Kibrom Tafere & Berhane,Guush & Chamberlin,Jordan & Abay,Mehari H., 2022. "Near-Real-Time Welfare and Livelihood Impacts of an Active Civil War : Evidence from Ethiopia," Policy Research Working Paper Series 10004, The World Bank.
    17. Martin-Shields, Charles P. & Stojetz, Wolfgang, 2019. "Food security and conflict: Empirical challenges and future opportunities for research and policy making on food security and conflict," World Development, Elsevier, vol. 119(C), pages 150-164.
    18. Aleksandar Keseljevic & Rok Spruk, 2022. "Estimating the Effects of Syrian Civil War," Papers 2209.03046, arXiv.org.
    19. Chiwuzulum Odozi, John & Uwaifo Oyelere, Ruth, 2019. "Violent Conflict Exposure in Nigeria and Economic Welfare," IZA Discussion Papers 12570, Institute of Labor Economics (IZA).
    20. Richard Akresh, 2016. "Climate Change, Conflict, and Children," HiCN Working Papers 221, Households in Conflict Network.

    More about this item

    Keywords

    Aceh; armed conflict; economic growth; Indonesia; natural disaster; peace dividend;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:compsc:v:39:y:2022:i:4:p:394-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.