Economics of Conflict

Conflict is defined as a struggle or clash between opposing forces. Conflict can be of different forms – battle, protest, fatal events, protests, civil unrest.

My research interest in the economics of conflict started in 2014 when I was a consultant at the World Bank working with Massimiliano Cali. We looked at how trade can help reduce or fuel conflict events. These papers are as a result of the collaborations we have had over the years.

  1. Income Shocks and Conflict: Evidence from Nigeria

This paper extends the micro evidence on the impact of income shocks on civil conflict using data across Nigerian states over the past decade. The paper uses an innovative empirical strategy matching household survey, oil production, and domestic and international price data to capture three separate channels linking income changes to conflict. Price increases of consumed items have a significant conflict-inducing effect consistent with the hypothesis that they reduce real incomes and thus the opportunity cost of fighting. Failure to include this consumption impact severely biases (toward zero) the conflict-reducing effect of price rises of agricultural commodities via production. In addition, oil price hikes increase conflict intensity in oil producing areas, consistent with the “rapacity” hypothesis. However, this effect disappears in the period after the agreement granting amnesty to militant groups in oil-producing areas. The paper also discusses the importance of factors mediating the impact of the shocks on conflict and a number of policy implications following the analysis. Finally, the empirical strategy is employed to unveil a strong relationship between income shocks and violence in the current Boko Haram conflict. The analysis suggests some policy implications, which may be relevant for the Nigerian context and beyond.

2. What drives conflict in Haiti? An empirical analysis in the 2000s

This paper provides a quantitative analysis of the impact of some economic and non economic factors on conflict in Haiti. The work focuses on the decade of the 2000s and implements two complementary empirical strategies: one examining the correlates of the level of conflict across space and the other examining the causal effects of economic shocks on conflict. We find that urbanization, internal migration, past conflict and land ownership are all important correlated of violence in Haiti in the 2003-06 period. In addition the results also suggest that economic shocks matter a great deal in explaining the pattern of conflict in Haiti. In particular, increases in remittances reduce conflict intensity, consistently with the idea that by raising incomes they raise the opportunity cost of participating into violent activities. Similarly, an increase in sectoral exports reduces violence in those departments whose employment is concentrated in that sector. The opposite is true for an increase in imports suggesting that surges in imports may affect violence via the displacement of domestic employment that they induce. Finally the evidence suggests that the election periods amplify the effect of economic shocks on conflict and that the presence of MINUSTAH appears to have reduced the long-term increase in conflict intensity.