Economic Shocks and Conflict: Evidence from Commodity Prices
Year: 2013
Type: article
Abstract: Higher national incomes are correlated with political stability. Is this relationship causal? We test three theories linking income to conflict with new data on export price shocks. Price shocks have no effect on new conflict, even large shocks in high-risk nations. Rising prices, however, weakly lead to shorter, less deadly wars. This evidence contradicts the theory that rising state revenues incentivize state capture, but supports the idea that rising revenues improve counter-insurgency capacity and reduce individual incentives to fight in existing conflicts. Conflict onset and continuation follow different processes. Ignoring this time dependence generates mistaken conclusions about income and instability. (JEL D72, D74, O13, O17, O19, Q02, Q34)
DOI: 10.1257/mac.6.4.1
Authors: Samuel Bazzi, Christopher Blattman
Institutions: Boston University, Columbia University
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3122306646