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

  • Lind, Jo Thori

    ()

    (Dept. of Economics, University of Oslo)

  • Moene, Karl Ove

    ()

    (Dept. of Economics, University of Oslo)

  • Willumsen, Fredrik

    ()

    (Dept. of Economics, University of Oslo)

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.

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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2009/Memo-05-2009.pdf
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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 05/2009.

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Length: 41 pages
Date of creation: 20 Feb 2009
Date of revision:
Handle: RePEc:hhs:osloec:2009_005
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
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  1. Guidolin, Massimo & La Ferrara, Eliana, 2004. "Diamonds are Forever, Wars are Not: Is Conflict Bad for Private Firms?," CEPR Discussion Papers 4668, C.E.P.R. Discussion Papers.
  2. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2004. "Institutions and the Resource Curse," DEGIT Conference Papers c009_012, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
  4. Michael Greenstone, 2007. "Is the "Surge" Working? Some New Facts," NBER Working Papers 13458, National Bureau of Economic Research, Inc.
  5. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
  6. Sachs, J-D & Warner, A-M, 1996. "Sources of Slow Growth in African Economies," Papers 545, Harvard - Institute for International Development.
  7. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  8. Radha Iyengar & Jonathan Monten, 2008. "Is There an "Emboldenment" Effect? Evidence from the Insurgency in Iraq," NBER Working Papers 13839, National Bureau of Economic Research, Inc.
  9. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
  10. Ana MaríaDíaz & FabioSánchez, 2004. "A Geography Of Illicit Crops (Coca Leaf) And Armed Conflict In Colombia," DOCUMENTOS CEDE 001918, UNIVERSIDAD DE LOS ANDES-CEDE.
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