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Economic Costs of Mass Violent Conflicts: Final Report for the Small Arms Survey, Geneva, Switzerland

Author

Listed:
  • Carlos Bozzoli
  • Tilman Brück
  • Thorsten Drautzburg
  • Simon Sottsas

Abstract

This paper provides a critical analysis of the possible methods, data sources and the existing results of the field of 'the economic costs of mass violent conflict' by identifying strengths and weaknesses of the existing literature. The report evaluates content, methods, and data sources of the existing studies. Regarding the content, the studies offer a broad range of tested cause and impact variables. However, their selection of considered factors is quite sketchy, and a general theoretical underpinning is missing. This warrants above all a better understanding of the channels of indirect effects of the economic consequences of mass violent conflicts. Out of the combination of findings from the different studies we can hypothesize that investment, military expenditure, sectoral shifts, and institutions and policies are key channels. To consider the economic costs, aside from accounting, most studies rely on counterfactual regression analyses. Also with respect to the methodology, an evolutionary progress has not taken place in the literature. The most prominent data sets used are the COW and the UCDP/PRIO for conflicts and the Penn World Tables and the World Development Indicators for socioeconomic data. Based on the critical survey of the literature we propose three models for estimating crosscountry costs of mass violent conflict. These models differ by complexity, ranging from standard regression analysis to computable general equilibrium models. We also discuss other forms of violent conflicts and possibilities to analyze them by using the proposed models.

Suggested Citation

  • Carlos Bozzoli & Tilman Brück & Thorsten Drautzburg & Simon Sottsas, 2008. "Economic Costs of Mass Violent Conflicts: Final Report for the Small Arms Survey, Geneva, Switzerland," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 42, number pbk42, Enero-Abr.
  • Handle: RePEc:diw:diwpok:pbk42
    Note: IV, 91 p.
    as

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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.82459.de/diwkompakt_2008-042.pdf
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    References listed on IDEAS

    as
    1. Shemyakina, Olga, 2011. "The effect of armed conflict on accumulation of schooling: Results from Tajikistan," Journal of Development Economics, Elsevier, vol. 95(2), pages 186-200, July.
    2. Soares, Rodrigo R., 2006. "The welfare cost of violence across countries," Journal of Health Economics, Elsevier, vol. 25(5), pages 821-846, September.
    3. James H. Stock & Mark W. Watson, 2008. "Heteroskedasticity-Robust Standard Errors for Fixed Effects Panel Data Regression," Econometrica, Econometric Society, vol. 76(1), pages 155-174, January.
    4. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    5. Astri Suhrke & Espen Villanger & Susan L. Woodward, 2005. "Economic Aid to Post-conflict Countries: A Methodological Critique of Collier and Hoeffler," CMI Working Papers WP 2005:4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    6. Dirk C. Van Raemdonck & Paul F. Diehi, 1989. "After the Shooting Stops: Insights on Postwar Economic Growth," Journal of Peace Research, Peace Research Institute Oslo, vol. 26(3), pages 249-264, August.
    7. Smith, R P, 1989. "Models of Military Expenditure," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(4), pages 345-359, Oct.-Dec..
    8. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Brauer Jurgen & Dunne John P, 2011. "On the Cost of Violence and the Benefit of Peace," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-12, January.
    2. Jurgen Brauer & J. Paul Dunne, 2011. "Macroeconomics and Violence," Chapters, in: Derek L. Braddon & Keith Hartley (ed.), Handbook on the Economics of Conflict, chapter 13, Edward Elgar Publishing.
      • Jurgen Brauer & J Paul Dunne, 2010. "Macroeconomics and Violence," Working Papers 1003, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

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    More about this item

    Keywords

    Development economics; violence; conflict; war; macro-economics; econometrics; GDP; growth; reconstruction I;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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