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Civil Wars and International Trade

Author

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  • Martin, Philippe
  • Mayer, Thierry
  • Thoenig, Mathias

Abstract

This paper analyzes empirically the relationship between civil wars and international trade. We first show that trade destruction due to civil wars is very large and persistent and increases with the severity of the conflict. We then test the presence of two effects that trade can have on the risk of civil conflicts: it may act as a deterrent if trade gains are put at risk during civil wars but it may also act as an insurance if international trade provides a substitute to internal trade during civil wars. We find support for the presence of these two mechanisms and conclude that trade openness may deter the most severe civil wars (those that destroy the largest amount of trade) but may increase the risk of lower scale conflicts.

Suggested Citation

  • Martin, Philippe & Mayer, Thierry & Thoenig, Mathias, 2008. "Civil Wars and International Trade," CEPR Discussion Papers 6659, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6659
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, pages 691-751.
    2. S. Brock Blomberg & Gregory D. Hess, 2006. "How Much Does Violence Tax Trade?," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 599-612, November.
    3. John Romalis, 2007. "NAFTA's and CUSFTA's Impact on International Trade," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 416-435, August.
    4. Paul Collier & Anke Hoeffler & Dominic Rohner, 2009. "Beyond greed and grievance: feasibility and civil war," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 1-27, January.
    5. Paul Collier & Dominic Rohner, 2008. "Democracy, Development, and Conflict," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 531-540, 04-05.
    6. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 865-900.
    7. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
    8. James D. Fearon, 2005. "Primary Commodity Exports and Civil War," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(4), pages 483-507, August.
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    Citations

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    Cited by:

    1. Bosker, Maarten & de Ree, Joppe, 2014. "Ethnicity and the spread of civil war," Journal of Development Economics, Elsevier, pages 206-221.
    2. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "War Signals: A Theory of Trade, Trust, and Conflict," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 1114-1147.
    3. Cagatay Bircan & Tilman Brück & Marc Vothknecht, 2010. "Violent conflict and inequality," Brooks World Poverty Institute Working Paper Series 12910, BWPI, The University of Manchester.
    4. Nicolas Berman & Mathieu Couttenier, 2015. "External Shocks, Internal Shots: The Geography of Civil Conflicts," The Review of Economics and Statistics, MIT Press, pages 758-776.
    5. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 863-885, November.
    6. Thierry Verdier, 2010. "Regional Integration, Fragility and Institution Building: An Analytical Framework Applied to the African Context," EUI-RSCAS Working Papers 38, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    7. Garfinkel, Michelle R. & Syropoulos, Constantinos, 2015. "Trade openness and the settlement of domestic disputes in the shadow of the future," Research in Economics, Elsevier, vol. 69(2), pages 191-213.
    8. Andreas Freytag & Daniel Meierrieks & Angela Münch & Friedrich Schneider, 2010. "Patterns of Force: System Strength, Terrorism and Civil War," Economics of Security Working Paper Series 28, DIW Berlin, German Institute for Economic Research.
    9. Stéphane Auray & Aurélien Eyquem & Frédéric Jouneau-Sion, 2009. "Riots, Battles and Cycles," Cahiers de recherche 09-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke, revised 05 Apr 2009.
    10. repec:ebd:wpaper:159 is not listed on IDEAS
    11. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2016. "Trust No One?: Security and International Trade," IDB Publications (Working Papers) 7684, Inter-American Development Bank.
    12. Maystre, Nicolas & Olivier, Jacques & Thoenig, Mathias & Verdier, Thierry, 2014. "Product-based cultural change: Is the village global?," Journal of International Economics, Elsevier, pages 212-230.
    13. Ksoll, Christopher & Macchiavello, Rocco & Morjaria, Ameet, 2010. "The Effect of Ethnic Violence on an Export-Oriented Industry," CEPR Discussion Papers 8074, C.E.P.R. Discussion Papers.
    14. Gutmann, Jerg & Neuenkirch, Matthias & Neumeier, Florian, 2016. "Precision-Guided or Blunt? The Effects of US Economic Sanctions on Human Rights," ILE Working Paper Series 2, University of Hamburg, Institute of Law and Economics.
    15. D'Souza, Anna, 2014. "Conflict and Trade: Implications for Agriculture and Food Security," Proceedings Issues, 2014: Food, Resources and Conflict, December 7-9, 2014, San Diego, California 197200, International Agricultural Trade Research Consortium.
    16. Massimiliano Calì & Wissam Harake & Fadi Hassan & Clemens Struck, 2015. "The Impact of the Syrian Conflict on Lebanese Trade," World Bank Other Operational Studies 21914, The World Bank.
    17. Roberto Ezcurra & Beatriz Manotas, 2015. "Does globalization promote civil war? An empirical research," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1501, Departamento de Economía - Universidad Pública de Navarra.
    18. Fenske, James & Kala, Namrata, 2017. "1807: Economic shocks, conflict and the slave trade," Journal of Development Economics, Elsevier, pages 66-76.
    19. Marion Jansen & Carolina Lennon & Roberta Piermartini, 2016. "Income volatility: whom you trade with matters," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 127-146, February.
    20. Mathieu Couttenier & Raphael Soubeyran, 2010. "Civil War in a Globalized World: Diplomacy and Trade," Working Papers 10-02, LAMETA, Universtiy of Montpellier, revised Feb 2010.
    21. Mathieu COUTTENIER & Raphael SOUBEYRAN, 2011. "Diplomatic Intervention in Civil War : Trade for All or Trade for One?," Working Papers 11-08, LAMETA, Universtiy of Montpellier, revised Apr 2011.
    22. Crozet, Matthieu & Hinz, Julian, 2016. "Friendly fire - the trade impact of the Russia sanctions and counter-sanctions," Kiel Working Papers 2059, Kiel Institute for the World Economy (IfW).
    23. Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ,Jason Daniel, 2015. "Infrastructure in conflict-prone and fragile environments : evidence from the Democratic Republic of Congo," Policy Research Working Paper Series 7273, The World Bank.
    24. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2016. "Trust No One?: Security and International Trade," IDB Publications (Working Papers) 94636, Inter-American Development Bank.
    25. Julian Hinz & Elsa Leromain, 2016. "Politics of Global Value Chains," Working Papers 1026, Economic Research Forum, revised Jul 2016.

    More about this item

    Keywords

    civil war; globalization; trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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