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The Evolution of Conflict and Effectiveness of Aid

  • Dimico, Arcangelo

The effect of aid on civil war has been widely debated. In this paper we introduce a new framework to evaluate the effectiveness of aid on conflict. Using proxies for the evolution of conflict we show that over the course of the conflict aid significantly affects the escalation and de-escalation of conflicts and that both measures are also highly sensitive to the rate of change in the share of aid. These results provide useful indications from a policy point of view in terms of the timing of aid to countries experiencing a conflict. We also show that the evolution of conflict significantly affects economic growth providing evidence of a sort of indirect effect of aid on economic growth.

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File URL: http://mpra.ub.uni-muenchen.de/47050/1/MPRA_paper_47050.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 47050.

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Date of creation: 30 Apr 2013
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Handle: RePEc:pra:mprapa:47050
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  1. James McHugh & Theodora Kosma & Dimitri G. Demekas, 2002. "The Economics of Post Conflict Aid," IMF Working Papers 02/198, International Monetary Fund.
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  3. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  4. King, Gary & Zeng, Langche, 2001. "Explaining Rare Events in International Relations," International Organization, Cambridge University Press, vol. 55(03), pages 693-715, June.
  5. Barro, Robert J. & Lee, Jong-Wha, 2005. "IMF programs: Who is chosen and what are the effects?," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1245-1269, October.
  6. Christopher Blattman & Edward Miguel, 2009. "Civil War," NBER Working Papers 14801, National Bureau of Economic Research, Inc.
  7. Antonio David & Fabiano Rodrigues Bastos & Marshall Mills, 2011. "Post-Conflict Recovery; Institutions, Aid, or Luck?," IMF Working Papers 11/149, International Monetary Fund.
  8. Pack, Howard & Pack, Janet Rothenberg, 1990. "Is Foreign Aid Fungible? The Case of Indonesia," Economic Journal, Royal Economic Society, vol. 100(399), pages 188-94, March.
  9. Michael Bleaney & Arcangelo Dimico, . "Incidence, Onset and Duration of Civil Wars: A Review of the Evidence," Discussion Papers 09/08, University of Nottingham, CREDIT.
  10. Collier, Paul & Hoeffler, Anke, 2004. "Aid, policy and growth in post-conflict societies," European Economic Review, Elsevier, vol. 48(5), pages 1125-1145, October.
  11. Nunn, Nathan & Qian, Nancy, 2012. "Aiding Conflict: The Impact of U.S. Food Aid on Civil War," CEPR Discussion Papers 8799, C.E.P.R. Discussion Papers.
  12. de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
  13. Hansen, Henrik & Tarp, Finn, 2000. "Aid and Growth Regressions," MPRA Paper 62288, University Library of Munich, Germany.
  14. Grossman, Herschel I, 1999. "Kleptocracy and Revolutions," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 267-83, April.
  15. Thomas Flores & Irfan Nooruddin, 2009. "Financing the peace: Evaluating World Bank post-conflict assistance programs," The Review of International Organizations, Springer, vol. 4(1), pages 1-27, March.
  16. William Easterly, 2008. "Can the West Save Africa?," NBER Working Papers 14363, National Bureau of Economic Research, Inc.
  17. Paul Collier & David Dollar, 2004. "Development effectiveness: what have we learnt?," Economic Journal, Royal Economic Society, vol. 114(496), pages F244-F271, 06.
  18. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
  19. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
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