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Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan

Author

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  • Jo Thori Lind
  • Karl Ove Moene
  • Fredrik Willumsen

Abstract

We show that the recent rise in Afghan opium production is caused by violent conflicts. Violence destroys roads and irrigation, crucial to alternative crops, and weakens local incentives to rebuild infrastructure and enforce law and order. Exploiting a unique data set, we show that Western hostile casualties, our proxy for conflict, have strong impact on subsequent local opium production. This proxy is shown to be exogenous to opium. We exploit the discontinuity at the end of the planting season: Conflicts have strong effects before and no effect after planting, assuring causality. Effects are strongest where government law enforcement is weak.

Suggested Citation

  • Jo Thori Lind & Karl Ove Moene & Fredrik Willumsen, 2009. "Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan," CESifo Working Paper Series 2573, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2573
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    Cited by:

    1. Ciarli, Tommaso & Kofol, Chiara & Menon, Carlo, 2015. "Business as unusual. An explanation of the increase of private economic activity in high-conflict areas in Afghanistan," LSE Research Online Documents on Economics 65015, London School of Economics and Political Science, LSE Library.
    2. François Libois, 2016. "Households in Times of War : Adaptation Strategies during the Nepal Civil War," Working Papers 1603, University of Namur, Department of Economics.
    3. Vincenzo Bove & Leandro Elia, 2013. "Drugs and Violence in Afghanistan: A Panel Var With Unobserved Common Factor Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(6), pages 535-554, December.
    4. Mitra, Anirban & Mitra, Shabana, 2016. "Redistribution of Economic Resources due to Conflict: The Maoist Uprising in Nepal," MPRA Paper 75545, University Library of Munich, Germany.
    5. Noury, Abdul G. & Speciale, Biagio, 2016. "Social constraints and women's education: Evidence from Afghanistan under radical religious rule," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 821-841.
    6. Botero Degiovanni, Hernan, 2013. "The Effects of Drug Enforcement on Violence in Colombia 1999-2010: A Spatial Econometric Approach," MPRA Paper 49459, University Library of Munich, Germany.
    7. repec:eee:jpolmo:v:39:y:2017:i:5:p:741-761 is not listed on IDEAS

    More about this item

    Keywords

    conflict; narcotics production; resource curse; Afghanistan;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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