Nepal's civil war and the changing sources of income: The role of sectoral shifts and remittances in mitigation and recovery

Given the increased worldwide unrest and a large number of displaced individuals, understanding the economic impacts of civil war has been the subject of growing attention by academics and policymakers. The 10‐year civil war in Nepal from 1996 to 2006 provides an opportunity to assess the impact of civil unrest on income sources and remittance patterns. In this study, we examine the changes in household income generating processes over the period of the Nepali civilwar. Using survey data from the Nepal Living Standards Survey (NLSS) in 1995/1996 and 2010/2011, we observe household income and remittance patterns before and after the civil war. Specifically, we employ a difference‐in‐difference estimator that focuses on the heterogeneity in civil unrest within Nepal to examine how the civil war impacted the sources of household income. Within the context of a slower growth rate of income after the revolution for those in the hardest hit districts, we find that there was also a change in the composition of income sources. In particular, our results suggest that there was a shift from a reliance on wages in the nonagricultural sector to wages in the agricultural sector; that there was a shift from external remittances to internal remittances; and finally that home production—the market value of items produced and consumed within the household—may be taking the place of income in regions hit by unrest. “People living in zones of war are maimed, killed, and see their property destroyed. They may be displaced or prevented from attending school or earning a living. To the extent that these costs are borne unequally across groups, the conflict could intensify economic inequality as well as poverty. The destruction (and deferred accumulation) of both human and physical capital also hinder macroeconomic performance, combining with any effects of war on institutions and technology to impact national income growth. Understanding the economic legacies of conflict is important to the design of post‐conflict recovery” (Blattman & Miguel, 2010).     

Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa

This paper considers the impact of foreign aid flows on the risk of civil conflict. We improve on earlier studies on this topic by addressing the problem of the endogenous aid allocation using GDP levels of donor countries as instruments. A more structural addition to the literature is that we efficiently control for unobserved country specific effects in typical conflict onset and conflict continuation models by first differencing. The literature often overlooks the dynamic nature of these types of models, thereby forcing unlikely i.i.d. structures on the error terms implicitly.¹ As a consequence, malfunctioning institutions, deep-rooted political grievances, or any other obvious, yet unobserved and time persistent determinants of war are simply assumed away. We find a statistically significant and economically important negative effect of foreign aid flows on the probability of ongoing civil conflicts to continue (the continuation probability), such that increasing aid flows tends to decrease civil conflict duration. We do not find a significant relationship between aid flows and the probability of civil conflicts to start (the onset probability).     

Growing up in a civil war and political participation: Evidence from Guatemala*

Guatemala experienced a 36-year-long civil war from 1960 to 1996. I use this event to understand whether growing up in an area of political violence has any impact on future political participation. I combine data from the distribution of the number of human rights violations during Guatemala's civil war with nationally representative data on political participation from the 2001 Living Standard Measurement Survey. Results suggest that exposure to conflict during youth affects political participation in adulthood. Exposure to conflict has a small negative association with formal political engagement and it has no effect on community participation. The results also indicate a negative relationship between growing up in an area of political violence and trust in the judicial system as adults.     

Democratization and civil war

This article examines the impact of civil war on democratization, particularly focusing on whether civil war provides an opportunity for institutional reform. We investigate the impact of war termination in general, along with prolonged violence, rebel victory and international intervention on democratization. Using an unbalanced panel data set of 96 countries covering a 34-year period, our analysis suggests that civil war lowers democratization in the succeeding period. Our findings also suggest that United Nations intervention increases democratization, as do wars ending in stalemates. However, wars ending in rebel victories seem to reduce democratization. These findings appear robust to conditioning, different instrument sets, modelling techniques and the measurement of democracy.     

Violent conflict and institutional change*

Violent conflict such as civil war may influence institutional quality by changing the political equilibrium or by changing preferences and norms. This study presents empirical evidence that in some cases civil war deteriorates institutional quality. By applying the synthetic control method to 25 cases of civil war between 1960 and 2010, I construct the counterfactual path of institutional quality in the absence of civil war. The effects of civil war are heterogeneous, but for a substantial minority of cases civil war appears to deteriorate institutional quality. These findings have implications for post-civil war economic recovery as well as long run economic development.     

Ethnic Diversity,Civil War and Redistribution*

In a game‐theoretic framework, we analyse the circumstances under which self‐enforcing redistribution and power‐sharing coalitions can be used to peacefully resolve ethnic conflict. The existence of a pacific equilibrium depends crucially on ethnic diversity (the number of ethnic groups). The risk of civil war is comparatively high at intermediate levels of ethnic diversity. The risk is low if a society is either very homogeneous or very diverse. Predictions of the model are consistent with evidence on the incidence of civil war.     

CIVIL WAR EXPOSURE AND VIOLENCE

In recent years scholars have begun to focus on the consequences of individuals' exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player's home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards. This link is robust to region fixed effects, country characteristics (e.g. rule of law, per capita income), player characteristics (e.g. age, field position, quality), outliers, and team fixed effects. Reinforcing our claim that we isolate the effect of civil war exposure rather than simple rule breaking or something else entirely, there is no meaningful correlation between our measure of exposure to civil war and soccer performance measures not closely related to violent conduct. The result is also robust to controlling for civil wars before a player's birth, suggesting that it is not driven by factors from the distant historical past.     

Rooted in Violence: Civil War,International Trade and the Expansion of Palm Oil in Colombia

Internal armed conflict severely inhibits economic growth according to a prominent set of civil war literature. Similarly, emerging scholarship finds that civil war inhibits processes of economic globalisation which are argued to produce economic growth. A case in point is international trade, which is reportedly stymied by intra-state war. In contrast, this article employs a critical theoretical framework which acknowledges the often violent tendencies of globalised capitalism. By analysing Colombia's palm oil industry, this article argues that civil war violence can facilitate international trade. In the case study which is presented, violence perpetrated by Colombia's public armed forces and right-wing paramilitaries has enabled the palm oil sector to enter and compete in the globalised economy. This includes processes of forced displacement, which have acquired land for palm oil cultivation, and violence directed at civil groups deemed inimical to the interests of the palm oil sector. By employing a micro-level approach, this article attempts to isolate violent trends related to palm oil cultivation in Meta, the largest African palm-growing region in Colombia. An attempt is therefore made to give an empirically informed account of how violence in Colombia's civil war is facilitating palm oil exports.     

The political economy of linguistic cleavages

This paper uses a linguistic tree, describing the genealogical relationship between all 6912 world languages, to compute measures of diversity at different levels of linguistic aggregation. By doing so, we let the data inform us on which linguistic cleavages are most relevant for a range of political economy outcomes, rather than making ad hoc choices. We find that deep cleavages, originating thousands of years ago, lead to better predictors of civil conflict and redistribution. The opposite pattern emerges when it comes to the impact of linguistic diversity on growth and public goods provision, where finer distinctions between languages matter.     

Legacies of violence: trust and market development

We study the effect of individual exposure to civil conflict on trust and preferences for market participation. We conducted behavioral experiments and surveys among 426 randomly selected individuals more than a decade after the end of the Tajik civil war. We find that exposure to violence undermines trust within localities, decreases the willingness to engage in impersonal exchange, and reinforces kinship-based norms of morality. The effect is strongest where infighting was most severe and where political polarization is high. Robustness of the results to the use of pre-war controls, village fixed effects, and alternative samples suggest that selection into victimization is unlikely to explain the results.     

Putting Bosnia in its Place: Critical Geopolitics and the Representation of Bosnia in the British Print Media

Media reporting of the Bosnian Conflict (1992–1995) was significant in shaping Western policy responses to the collapse of the former Yugoslavia. This article considers the role of the British print media in articulating and representing Bosnia as a place in the geographical imagination. Bosnia, for many, was a sophisticated place in the heart of Europe whilst for others it was Bosnia's Balkan identity and all the associated negative connotations which informed journalistic reports. Representations of Bosnia were further complicated by the use of historical and geographical analogies. Finally I argue that the war of words which defined the Bosnian conflict as a ‘civil war’ and the result of ‘ancient ethnic hatreds’ resulted in the war being seen as a humanitarian catastrophe requiring a humanitarian response. These contested and contradictory narratives of place had profound consequences for political and military strategies during the war and for the final settlement at Dayton in 1995.     

Did rainfall shocks cause civil conflict in Sub-Saharan Africa? The implications of data revisions

In their seminal paper, Miguel et al. (2004) found that negative rainfall shocks (measured as negative year-on-year rainfall growth) had caused civil conflict in sub-Saharan Africa over the 1981–1999 period. Since then, the rainfall and conflict data they used had undergone multiple revisions. We show that rainfall shocks are no longer statistically significant for civil conflict when the revised data are used. This is true whether we employ a different functional form for rainfall, extend the sample to include more recent observations, use longer lags for rainfall shocks, employ dynamic panel regression, or panel regressions that take into account of cross-sectional dependence. Using rainfall shocks as instruments for growth, we also find that growth is insignificant for civil conflict if the revised data are used. Upon further investigation, we find that updates in the rainfall and conflict data for one or a few countries may alone cause rainfall shocks to lose statistical significance.     

Growth in fragile states in Africa: Conflict and post‐conflict capital accumulation

This article analyses the pattern of capital accumulation in Africa and its interaction with political fragility. Political fragility, defined as armed conflict or civil war, retards or reverses gains with respect to capital accumulation, slowing long‐term economic growth. Many countries experience negative rates of capital accumulation, particularly during periods of acute political instability. In post‐war periods, countries generally continue to experience capital destruction, lending support to the “war ruin hypothesis.” This has implications for long‐term economic growth in view of the strong association between capital accumulation and economic performance. The main policy implication of the analysis is that African countries and their international partners should pay more attention to capital accumulation, including capital reconstruction after periods of political instability, to lay the foundations for sustainable economic growth.     

The long-term effects of civil conflicts on education,earnings, and fertility: Evidence from Cambodia

This paper examines the long-term effects of exposure to civil war and genocide on the educational attainment, earnings, and fertility of individuals in Cambodia. Given the well-documented causal links between schooling and labor productivity, it is surprising that past studies show that civil conflicts reduce educational attainment, but generally not earnings of individuals. Using variation in the degree of Cambodians’ exposure to civil conflicts during primary school age, we find that disruption to primary education during civil conflicts decreases educational attainment and earnings, increases fertility, and has negligible effects on health of individuals several decades later. Our findings suggest that the effect of conflict on schooling disruption has adverse consequences on long-term labor productivity and economic development.     

Identity,space and the political economy of conflict in Central Africa

This article examines the current war in the Congo (Democratic Republic of; formerly Zaire) by incorporating recent theoretical work from the sub‐fields of International Political Economy (IPE), Identity Theory, and Critical Geopolitics. This article places the current conflict in a larger historic context, emphasising a lengthy tradition of resource extraction, identity formation and spatial definition. The essay argues that existing explanations of the conflict over‐emphasise the supposed greed of the actors involved, without sufficient attention paid to the discursive aspects of the conflict. The essay constructs a theoretical approach that integrates the material and the discursive by exploring how identity and space shape the political economy of violence in the region. The essay concludes with a ‘first cut’ analysis of the crisis in Central Africa utilising this framework, organised along local, regional and global levels of analysis.     

Violent conflict and online segregation: An analysis of social network communication across Ukraine's regions

Does the intensity of a social conflict affect political division? Traditionally, social cleavages are seen as the underlying cause of political conflicts. It is clear, however, that a violent conflict itself can shape partisan, social, and national identities. In this paper, we ask whether social conflicts unite or divide the society by studying the effects of Ukraine's military conflict with Russia on online social ties between Ukrainian provinces (oblasts). In order to do that, we collected original data on the cross-regional structure of politically relevant online communication among users of VKontakte social networking site. We analyze the panel of provinces spanning the most active phases of domestic protests and military conflict and isolate the effects of province-specific war casualties on the nature of inter-provincial online communication. The results show that war casualties entice strong emotional response in the corresponding provinces, but do not necessarily increase the level of social cohesion in inter-provincial online communication. We find that the intensity of military conflict entices online activism, but activates regional rather than nation-wide network connections. We also find that military conflict tends to polarize some regions of Ukraine, especially in the East. Our research brings attention to the underexplored areas in the study of civil conflict and political identities by documenting the ways the former may affect the latter.     

The human capital consequences of civil war: Evidence from Guatemala

We combine data from the 2002 National Population Census and the distribution of the number of human rights violations and victims across 22 departments to examine how Guatemala's 36-year-long civil war affected human capital accumulation. The year of birth and the department of birth jointly determine an individual's exposure during school age to three different periods of the civil war, namely the initial period (1960-1978), the worst period (1979-1984), and the final period (1985-1996). We find a strong negative impact of the civil war on the education of the two most disadvantaged groups, namely rural Mayan males and females. Among rural Mayan males, those who were school age during the three periods of the civil war in departments where more human rights violations were committed completed 0.27, 0.71, and 1.09 years less of schooling respectively whereas rural Mayan females exposed to the three periods of the war completed 0.12, 0.47, and 1.17 years less of schooling respectively. Given an average of 4.66 and 3.83 years of schooling for males and females, these represent declines of 6, 15, and 23% for males and 3, 12, and 30% for females. Our results are robust to the inclusion of indicators for department of residence, year of birth, and controls for different trends in education and human development in war-affected and peaceful departments of Guatemala and suggest that the country's civil war may have deepened gender, regional, sectoral, and ethnic disparities in schooling.     

Reputation,Social Identity and Social Conflict

We interpret the psychology literature on social identity and examine its implications. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced‐form bargaining game. We show that this struggle for resources drives a conflict through the rational destruction of surplus. We assume that the population contains both rational players and behavioral players. Behavioral players aggressively discriminate against members of the other social group. The existence and specification of the behavioral player is motivated by the social identity literature. For rational players, group membership has no payoff‐relevant consequences. We show that rational players can contribute to the conflict by aggressively discriminating and that this behavior is consistent with existing empirical evidence. Our paper relates to the empirical literature which finds that social heterogeneity tends to be increasing in economic variables which we interpret as indicating inefficiency. We provide an explanation that, as social groups compete for surplus, disagreement and inefficiency can result. Our work also relates to the social conflict literature, which examines the relationship between macro level factors such as unemployment and civil disturbances. This literature finds that the amount of social conflict tends to be increasing in the inequitability of the environment.     

Identity and group conflict

We experimentally investigate the effects of real and minimal identities on group conflict. In turn we provide a direct empirical test of the hypotheses coined by Amartya Sen that the salience of a real identity escalates conflict but that of a mere classification would not do so. In a baseline treatment, two groups – East Asians and Caucasians – engage in a group contest, but information on the racial composition of the groups is not revealed. In the minimal identity treatment each group is arbitrarily given a different color code, whereas in the real identity treatment the race information is revealed. Supporting Sen׳s hypotheses, we find that compared to the baseline, free-riding declines and conflict effort increases in the real identity treatment but not in the minimal identity treatment. Moreover, this occurs due to an increase in efforts in the real identity treatment by females in both racial groups.     

War and local collective action in Sierra Leone

We study the brutal 1991–2002 Sierra Leone civil war using nationally representative household data on conflict experiences, postwar economic outcomes, local politics and collective action. Individuals whose households directly experienced more intense war violence are robustly more likely to attend community meetings, more likely to join local political and community groups, and more likely to vote. Tests using prewar controls and alternative samples suggest that selection into victimization is unlikely to be driving the results. More speculatively, the findings could help partially explain the rapid postwar political and economic recoveries observed in Sierra Leone and after several other recent African civil wars.