Trade and civil conflict: Revisiting the cross‐country evidence

Abstract

We revisit and expand the evidence on the impact of trade shocks on intra-state conflict by using a large sample of developing countries in the 1960-2010 period. The results suggest that increases in the price of a country's exported commodities raise the country's risk of civil conflict and its duration. The effect on conflict risk is mainly driven by the price of point-source commodities, in line with the rapacity effect theory of conflict. Intense trading with contiguous countries is associated with lower duration of conflict, consistent with the idea that such trade reduces the incentive of these countries to fuel conflict in their neighbor. Trading with neighbors is also associated with a lower risk of conflict when such trade occurs under trade agreements. On the other hand, we find no support for the opportunity cost theory via exported and imported commodities, nor via the economic cycle in export markets. We also identify a number of conditions under which the changes in the value of exported commodities cease to matter for conflict probability.* Cal ı: Trade and Competitiveness Global Practice,

A Bayesian framework for studying climate anomalies and social conflicts

“…However, in the short run, trade can exacerbate conflicts. This in part may be due to the higher exposure that it creates for some countries in relation to trade shocks and trade volatility, which have been linked to due to various forms of social conflict (Calì & Mulabdic, 2017; Janus & Riera‐Crichton, 2015). This may also be due to pressures on resource reallocation and redistribution between different sectors such as those of agricultural, commodity, and industry, and corresponding implications for jobs and wages within these sectors.…”

“…Socio-economic drivers like trade and overall levels of development are also known to be associated with social conflicts (Calì & Mulabdic, 2017;Janus & Riera-Crichton, 2015;Kim & Conceição, 2010). To control for these potential economic confounds, we first use data on country-level exports for different sectors such as commodity exports, agricultural exports, and manufacturing exports from the World Bank's multi-country economic time series 4 .…”

Foreign yield shocks and domestic price variability: the case of maize in developing countries

“…The foreign yield shocks facing each focus country are the import-share weighted sum of the exporters yield shocks using four-year lags of bilateral import shares from UN Comtrade (2020). The lag structure alleviates concerns about reverse causality (Calì and Mulabdic 2017); results are robust to alternative lag structures (appendix figure A3(D)). appendix section 'Variable construction' provides econometric specifications of PV ik,t , DY i,t , FY i,t variables for clarity; appendix figure A1 visualizes the data with boxplots.…”