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Post-Conflict Recovery; Institutions, Aid, or Luck?

Author

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  • Antonio David
  • Fabiano Rodrigues Rodrigues Bastos
  • Marshall Mills

Abstract

This paper identifies the factors linked to cross-country differentials in growth performance in the aftermath of social conflict for 30 sub-Saharan African countries using panel data techniques. Our results show that changes in the terms of trade are the most important correlate of economic performance in post-conflict environments. This variable is typically associated with an increase in the marginal probability of positive economic performance by about 30 percent. Institutional quality emerges as the second most important factor. Foreign aid is shown to have very limited ability to explain differentials in growth performance, and other policy variables such as trade openness are not found to have a statistically significant effect. The results suggest that exogenous factors ("luck") are an important factor in post-conflict recovery. They also highlight the importance in post-conflict settings of policies to mitigate the macroeconomic impact of terms of trade volatility (including countercyclical macroeconomic policies and innovative financing instruments) and of policies to promote export diversification.

Suggested Citation

  • Antonio David & Fabiano Rodrigues Rodrigues Bastos & Marshall Mills, 2011. "Post-Conflict Recovery; Institutions, Aid, or Luck?," IMF Working Papers 11/149, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:11/149
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    Citations

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    Cited by:

    1. Corinne Deléchat & Ejona Fuli & Dafina Glaser & Gustavo Ramirez & Rui Xu, 2015. "Exiting From Fragility in sub-Saharan Africa; The Role of Fiscal Policies and Fiscal Institutions," IMF Working Papers 15/268, International Monetary Fund.
    2. Serhan Cevik & Mohammad Rahmati, 2015. "Breaking the Curse of Sisyphus: An Empirical Analysis of Post-Conflict Economic Transitions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(4), pages 569-597, December.
    3. Raimundo Soto & Bassem Kamar, 2015. "Monetary Policy and Economic Performance in Resource Dependent Economies," Documentos de Trabajo 462, Instituto de Economia. Pontificia Universidad Católica de Chile..
    4. repec:eee:reveco:v:51:y:2017:i:c:p:19-35 is not listed on IDEAS
    5. Patricia Justino & Ivan Cardona & Rebecca Mitchell & Catherine Müller, 2012. "Quantifying the Impact of Women’s Participation in Post-Conflict Economic Recovery," HiCN Working Papers 131, Households in Conflict Network.
    6. Ibrahim Elbadawi & Raimundo Soto, 2013. "Exchange Rate Regimes for Post-conflict Recovery," Working Papers 748, Economic Research Forum, revised Apr 2013.
    7. Dimico, Arcangelo, 2013. "The Evolution of Conflict and Effectiveness of Aid," MPRA Paper 47050, University Library of Munich, Germany.

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