Estimating the direct costs of social conflicts: Road blockings in Bolivia
Social conflicts are a serious obstacle to economic growth in many Latin American societies, affecting economic activity both in the short and the long run. The purpose of this paper is twofold. First, we develop a methodology to estimate the direct, short-run impact of frequently occurring exponents of local conflicts, such as road blockings, on economic activity. The methodology is based on using high frequency (daily) data to estimate the relation between a proxy for economic activity and the occurrence of road blockings. Careful analysis of impulse-response functions traces the effect of such local social conflicts on economic activity. This information is combined with the aggregate annual time series relation between gross domestic product (GDP) and the high frequency proxy for economic activity to estimate the direct cost of local social conflicts for the economy as a whole. Second, we apply the proposed methodology to analyse the direct economic costs of road blockings in Bolivia, using detailed daily information for the year 2003. The results show that these costs are large. Stronger institutions are a critical factor in reducing the prevalence of such conflicts and to avoid the huge economic costs that they imply. Copyright © 2008 John Wiley & Sons, Ltd.
Volume (Year): 21 (2009)
Issue (Month): 7 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/5102/home|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
- Alesina, Alberto F & Rodrik, Dani, 1991.
"Distributive Politics and Economic Growth,"
CEPR Discussion Papers
565, C.E.P.R. Discussion Papers.
- Alberto Alesina & Dani Rodrik, 1991. "Distributive Politics and Economic Growth," NBER Working Papers 3668, National Bureau of Economic Research, Inc.
- Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
- Vincenzo Verardi, 2005.
"Electoral systems and income inequality,"
ULB Institutional Repository
2013/9887, ULB -- Universite Libre de Bruxelles.
- Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
- Vincenzo Verardi, 2004. "Electoral systems, racial tension and decentralization," ULB Institutional Repository 2013/9895, ULB -- Universite Libre de Bruxelles.
- Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993.
"Good policy or good luck?: Country growth performance and temporary shocks,"
Journal of Monetary Economics,
Elsevier, vol. 32(3), pages 459-483, December.
- William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993. "Good Policy or Good Luck? Country Growth Performance and Temporary Shocks," NBER Working Papers 4474, National Bureau of Economic Research, Inc.
- Shah, Anwar, 1998. "Balance, accountability, and responsiveness : lessons about decentralization," Policy Research Working Paper Series 2021, The World Bank.
- Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
- Bouton, Laurent & Gassner, Marjorie & Verardi, Vincenzo, 2008.
"Redistributing income under fiscal vertical imbalance,"
European Journal of Political Economy,
Elsevier, vol. 24(2), pages 317-328, June.
- Laurent Bouton & Marjorie Gassner & Vincenzo Verardi, 2008. "Redistributing income under fiscal vertical imbalance," ULB Institutional Repository 2013/9905, ULB -- Universite Libre de Bruxelles.
- Perron, Pierre & Vogelsang, Timothy J, 1992.
"Nonstationarity and Level Shifts with an Application to Purchasing Power Parity,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 10(3), pages 301-20, July.
- Vogelsang, T.I. & Perron, P., 1991. "Nonstationary and Level Shifts With An Application To Purchasing Power Parity," Papers 359, Princeton, Department of Economics - Econometric Research Program.
- Michael Faye & John McArthur & Jeffrey Sachs & Thomas Snow, 2004. "The Challenges Facing Landlocked Developing Countries," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 5(1), pages 31-68.
- Faguet, Jean-Paul, 2004. "Does decentralization increase government responsiveness to local needs?: Evidence from Bolivia," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 867-893, March.
When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:21:y:2009:i:7:p:932-946. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.