Civil conflict in developing countries over the last quarter of a century: An empirical overview of economic and social consequences

Abstract

There is a growing number of wars in developing countries and they are∼ concentrated among the least developed countries. This paper explores their economic and social consequences by examining the behaviour of countries worst affected by war from 1970 to 1990. Despite problems about methodology and data some important conclusions emerge. There were invariably large economic and social costs in addition to the direct battle deaths, although the effects varied according to the nature and duration of the conflict and the state of the economy. The costs are indicated by losses in GDP, exports and food production per capita compared with what might have been expected in the absence of conflict. In most cases, trends in infant mortality rates were significantly worse in war-affected than comparable economies. The extent of these losses varied, however, while other effects, such as on savings and investment propensities, government revenue shares and expenditure on social services, differed sharply among economies in conflict, reflecting differences in conditions, in government and donor policy and civil and private initiatives.

Re-Evaluating the Economic Costs of Conflicts

“…For example, focusing on African and Latin American countries, Stewart et al (1997) show that the growth rate of GDP is severely affected by conflicts. Gupta et al (2004), too, find for a sample of low-and middle-income countries several adverse consequences of conflicts, including lower economic growth.…”

Why are ethnically divided countries poor?

“…Stewart, et al (1997) find that level of development is correlated with incidence of war in the prior decade whereas poverty is not correlated with a civil war being fought in the following decade. …”

Postwar Reconstruction: Some Insights from Public Choice and Institutional Economics

“…Lake and Harrison (1990) stress the importance of relying on local planning and initiative. FitzGerald and Stewart (1997) discuss the importance of political science, anthropology and economics in understanding post conflict reconstruction. Stewart et al (1997) discuss the difficulty in the economic modeling of war-affected countries.…”