Civil Wars and International Trade
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.
|Date of creation:||Jan 2008|
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- Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008.
"Make Trade Not War?,"
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"Beyond greed and grievance: feasibility and civil war,"
Oxford Economic Papers,
Oxford University Press, vol. 61(1), pages 1-27, January.
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- John Romalis, 2005.
"NAFTA's and CUSFTA's Impact on International Trade,"
NBER Working Papers
11059, National Bureau of Economic Research, Inc.
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"How Much Does Violence Tax Trade?,"
CESifo Working Paper Series
1222, CESifo Group Munich.
- 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.
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