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Does conflict disrupt growth? Evidence of the relationship between political instability and national economic performance

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  • Solomon W. Polachek
  • Daria Sevastianova

Abstract

Current empirical growth models limit the determinants of country growth to geographic, economic, and institutional variables. This study draws on conflict variables from the Correlates of War (COW) project to ask a critical question: how do different types of conflict affect country growth rates? It finds that wars slow the economy. Estimates indicate that civil war reduces annual growth by 0.01--0.13 percentage points, and high-intensity inter-state conflict reduces annual growth by 0.18--2.77 percentage points. On the other hand, low-intensity conflict slows growth much less than high-intensity conflict, and may slightly increase it. The detrimental effect of conflict on growth is intensified when examining non-democracies, low-income countries, and countries in Africa.

Suggested Citation

  • Solomon W. Polachek & Daria Sevastianova, 2012. "Does conflict disrupt growth? Evidence of the relationship between political instability and national economic performance," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(3), pages 361-388, March.
  • Handle: RePEc:taf:jitecd:v:21:y:2012:i:3:p:361-388
    DOI: 10.1080/09638191003749783
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    File URL: http://hdl.handle.net/10.1080/09638191003749783
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    Cited by:

    1. repec:col:000411:016076 is not listed on IDEAS
    2. Rabeh Morrar & Faïz Gallouj, 2016. "The growth of the service sector in Palestine: the productivity challenge," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 179-204.

    More about this item

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P47 - Economic Systems - - Other Economic Systems - - - Performance and Prospects
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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