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How Many Bucks in a Bang: On the Estimation of the Economic Costs of Conflict

Author

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  • Olaf J. de Groot
  • Tilman Brück
  • Carlos Bozzoli

Abstract

The estimation of the costs of conflict is currently receiving a lot of attention in the literature. This paper aims to give a thorough overview of the existing literature, first by addressing the history of case studies that address conflict costs and second by looking at the existing body of cross-country analyses for conflict costs. In addition to the existing cross-country literature, a number of studies that only concern themselves with particular elements of conflict costs are included as well. In the end, this paper combines the insights from these previous analyses to explore how much room there is to further improve the existing studies. Specific recommendations are given how to proceed with the development of the field of conflict cost measurement.

Suggested Citation

  • Olaf J. de Groot & Tilman Brück & Carlos Bozzoli, 2009. "How Many Bucks in a Bang: On the Estimation of the Economic Costs of Conflict," Discussion Papers of DIW Berlin 948, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp948
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    References listed on IDEAS

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    1. Arunatilake, Nisha & Jayasuriya, Sisira & Kelegama, Saman, 2001. "The Economic Cost of the War in Sri Lanka," World Development, Elsevier, pages 1483-1500.
    2. 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.
    3. Quan Li & Ming Wen, 2005. "The Immediate and Lingering Effects of Armed Conflict on Adult Mortality: A Time-Series Cross-National Analysis," Journal of Peace Research, Peace Research Institute Oslo, vol. 42(4), pages 471-492, July.
    4. William D. Nordhaus, 2002. "The Economic Consequences of a War with Iraq," Cowles Foundation Discussion Papers 1387, Cowles Foundation for Research in Economics, Yale University.
    5. Richard Blundell & Stephen Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies.
    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. Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
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    12. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    13. Christopher Blattman & Jeannie Annan, 2010. "The Consequences of Child Soldiering," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 882-898, November.
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    15. 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.
    16. Sabrina DiAddario, 1997. "Estimating the economic costs of conflict: An examination of the two-gap estimation model for the case of Nicaragua," Oxford Development Studies, Taylor & Francis Journals, vol. 25(1), pages 123-141.
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    Cited by:

    1. Bove Vincenzo & Elia Leandro, 2014. "The impact of American and British involvement in Afghanistan and Iraq on health spending, military spending and economic growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 1-15, January.
    2. Olaf J. de Groot, 2012. "Analyzing the costs of military engagement," Economics of Peace and Security Journal, EPS Publishing, vol. 7(2), pages 41-49, July.
    3. 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.
    4. Michael Brzoska & Raphael Bossong & Eric van Um, 2011. "Security Economics in the European Context: Implications of the EUSECON Project," Economics of Security Working Paper Series 58, DIW Berlin, German Institute for Economic Research.
    5. 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.
    6. Jurgen Brauer & J Paul Dunne, 2010. "On the Cost of Violence and the Benefits of Peace," Working Papers 1011, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

    More about this item

    Keywords

    Conflict; costs of conflict; case studies;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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