IDEAS home Printed from https://ideas.repec.org/p/agg/wpaper/297.html
   My bibliography  Save this paper

Beyond the Overall Economic Downturn: Evidence on Sector-specific Effects of Violent Conflict from Indonesia

Author

Listed:
  • Marc Vothknecht
  • Sudarno Sumarto

Abstract

This paper analyses the impact of violent conflict on economic growth using micro-level data from Indonesia. We compile a panel dataset at district level for the period 2002-2008, and disentangle the overall negative economic effect of violent conflict into its sectoral components. Our results reveal substantial differences across sectors, with the most detrimental impact evident in manufacturing industries and the service sectors. Further, the short-run impacts on growth appear to be only temporal, and some evidence for the 'phoenix effect' in the early post-conflict period is found. The construction sector, in particular, recovers soon once conflict ends, while manufacturing industries and the finance sector appear especially reliant on a lasting peace. A series of alternative specifications confirm the main findings of the analysis.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marc Vothknecht & Sudarno Sumarto, "undated". "Beyond the Overall Economic Downturn: Evidence on Sector-specific Effects of Violent Conflict from Indonesia," Working Papers 297, Publications Department.
    • Handle: RePEc:agg:wpaper:297
    as

    Download full text from publisher

    File URL: https://smeru.or.id/sites/default/files/publication/beyondeconomicdownturn_eng.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eric Neumayer, 2004. "The Impact of Political Violence on Tourism," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(2), pages 259-281, April.
    2. Barron, Patrick & Kaiser, Kai & Pradhan, Menno, 2009. "Understanding Variations in Local Conflict: Evidence and Implications from Indonesia," World Development, Elsevier, vol. 37(3), pages 698-713, March.
    3. James C. Murdoch & Todd Sandler, 2002. "Economic Growth, Civil Wars, and Spatial Spillovers," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 91-110, February.
    4. Tilman Brück, "undated". "Macroeconomic Effects of the War in Mozambique -," QEH Working Papers qehwps11, Queen Elizabeth House, University of Oxford.
    5. Dani Rodrik, 2011. "The future of economic convergence," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 13-52.
    6. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    7. Humberto Lopez & Quentin Wodon, 2005. "The Economic Impact of Armed Conflict in Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 14(4), pages 586-602, December.
    8. Depetris Chauvin, Nicolas & Rohner, Dominic, 2009. "The Effects of Conflict on the Structure of the Economy," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 6, Verein für Socialpolitik, Research Committee Development Economics.
    9. Olaf De Groot, 2010. "The Spillover Effects Of Conflict On Economic Growth In Neighbouring Countries In Africa," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(2), pages 149-164.
    10. Organski, A.F.K. & Kugler, Jacek, 1977. "The Costs of Major Wars: The Phoenix Factor," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1347-1366, December.
    11. James Murdoch & Todd Sandler, 2002. "Civil wars and economic growth: A regional comparison," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(6), pages 451-464.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bove, Vincenzo & Gavrilova, Evelina, 2014. "Income and Livelihoods in the War in Afghanistan," World Development, Elsevier, vol. 60(C), pages 113-131.

    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. Vincenzo Bove & Leandro Eliay & Ron P Smith, 2014. "The relationship between panel and synthetic control estimators of the effect of civil war," BCAM Working Papers 1406, Birkbeck Centre for Applied Macroeconomics.
    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. Saakshi Jha & Sunny Bhushan & Nupur Nirola, 2024. "Is geopolitical risk always detrimental to economic growth?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-31, April.
    4. Olaf J. de Groot & Tilman Brück & Carlos Bozzoli, 2009. "How Many Bucks in a Bang: On the Estimation of the Economic Costs of Conflict," Economics of Security Working Paper Series 21, DIW Berlin, German Institute for Economic Research.
    5. Tilman Brück & Wim Naudé & Philip Verwimp, 2013. "Entrepreneurship and Violent Conflict in Developing Countries," WIDER Working Paper Series wp-2013-028, World Institute for Development Economic Research (UNU-WIDER).
    6. Kamin, Katrin, 2022. "Bilateral trade and conflict heterogeneity: The impact of conflict on trade revisited," Kiel Working Papers 2222, Kiel Institute for the World Economy (IfW Kiel).
    7. Rasmane Ouedraogo & Montfort Mlachila & Windemanegda Sandrine Sourouema & Ali Compaoré, 2022. "The impact of conflict and political instability on banking crises in developing countries," The World Economy, Wiley Blackwell, vol. 45(6), pages 1937-1977, June.
    8. Nektarios A. Michail, 2021. "The impact of conflict on the exchange rate of developing economies," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 916-930, May.
    9. Samer Matta & Michael Bleaney & Simon Appleton, 2022. "The economic impact of political instability and mass civil protest," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 253-270, March.
    10. Mojanoski Goran & Bucevska Vesna, 2022. "Event study on the reaction of the Balkan stock markets to the conflict between Russia and Ukraine," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(2), pages 18-27, December.
    11. Joseph Mawejje & Patrick McSharry, 2021. "The economic cost of conflict: Evidence from South Sudan," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1969-1990, November.
    12. Crippa, Andrea & d'Agostino, Giorgio & Dunne, Paul & Pieroni, Luca, 2022. "Conflict as a Cause of Migration," MPRA Paper 112327, University Library of Munich, Germany.
    13. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    14. 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.
    15. 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.
    16. Khusrav Gaibulloev, 2008. "The Impact of Terrorism and Conflicts on Growth in Asia, 1970–2004," Working Papers id:1789, eSocialSciences.
    17. Hönig, Tillman, 2017. "The Impact of Peace: Evidence from Nigeria," MPRA Paper 83302, University Library of Munich, Germany.
    18. Pedro Niño & Roberto Coronado & Thomas Fullerton & Adam Walke, 2015. "Cross-border homicide impacts on economic activity in El Paso," Empirical Economics, Springer, vol. 49(4), pages 1543-1559, December.
    19. Qureshi, Mahvash Saeed, 2013. "Trade and thy neighbor's war," Journal of Development Economics, Elsevier, vol. 105(C), pages 178-195.
    20. Aleksandar Keseljevic & Rok Spruk, 2022. "Estimating the Effects of Syrian Civil War," Papers 2209.03046, arXiv.org.

    More about this item

    Keywords

    violent conflict; economic growth; Indonesia;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    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:agg:wpaper:297. 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: Liza Hadiz (email available below). General contact details of provider: https://edirc.repec.org/data/smeruid.html .

    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.