Economic shocks and civil conflict: Evidence from foreign interest rate movements

Trade and civil conflict: Revisiting the cross‐country evidence

“…a developing country's commodity imports account for only a limited share of total consumption of commodities, since a large share of consumption, especially among poorer households, comes from domestic production. At the same time, the lack of significance of the demand variable MP suggests that the economic cycles in the export destination markets do not affect the probability of conflict at home, unlike other economic shocks such as rainfall (Miguel et al, ) and foreign interest rate movements (Hull and Imai, )…”

“…However, this result may just reflect other structural differences between countries with strong constraints, mostly high‐income Western democracies, and countries with weak constraints, mostly developing countries. Other studies provide evidence that the role of ethnic divisions is important in understanding the impact of income shocks on civil conflict (Hull and Imai, ) and political risk (Bruckner and Gradstein, )…”

“…The analysis in Miguel et al () is not strictly comparable with the others, as they restrict the sample to sub‐Saharan African countries. Hull and Imai () and Besley and Persson () use a different way of coding civil wars than B‐B (explained below), and Bruckner and Gradstein () examine the impact on political stability rather than on conflict per se. B‐B use various conflict datasets and find a significant effect of the conditioning factors in some specifications, although it is not clear in which ones as they do not report the individual interaction terms.…”

“…The majority of the recent studies we have reviewed use only this dataset (e.g. Nunn and Qian, 2014; Hull and Imai, ; Lin and Michaels, ; Bruckner and Ciccone, ), while the rest use it along with other data sources (e.g. B‐B, Besley and Persson, ).…”

Food Price Uncertainty and Political Conflict

“…As documented by the rich body of literature on the subject, conflict has been linked to a host of adverse outcomes for economic development, such as: lower economic growth and financial market instability (Abadie and Gardeazabal 2003;Kang and Meernik 2005), deterioration of public health (Ghobarah et al 2004), distortions to investment behaviour (Guidolin and Ferrara 2010) and decline in the quality of legal institutions (Svensson 1998). This has motivated many scholars to attempt to identify the role that economic shocks can play in causing conflict (Miguel et al 2004;Koubi et al 2012;Hull and Imai 2013;Nunn and Qian 2014). Among this line of inquiry, many have established a relationship between fluctuations in commodity price levels and conflict incidence (Besley and Persson 2008;Elbadawi and Hegre 2008;Guenther 2008;Br€ uckner and Ciccone 2010;Arezki and Br€ uckner 2011;Lagi et al 2011;D'Souza and Jolliffe 2012;Dube and Vargas 2013).…”