American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Economic Shocks and Conflict: Evidence from Commodity Prices
American Economic Journal: Macroeconomics
(pp. 1–38)
Abstract
Higher national incomes are correlated with political stability. Is this relationship causal? We test three theories linking income to conflict with new data on export price shocks. Price shocks have no effect on new conflict, even large shocks in high-risk nations. Rising prices, however, weakly lead to shorter, less deadly wars. This evidence contradicts the theory that rising state revenues incentivize state capture, but supports the idea that rising revenues improve counterinsurgency capacity and reduce individual incentives to fight in existing conflicts. Conflict onset and continuation follow different processes. Ignoring this time dependence generates mistaken conclusions about income and instability.Citation
Bazzi, Samuel, and Christopher Blattman. 2014. "Economic Shocks and Conflict: Evidence from Commodity Prices." American Economic Journal: Macroeconomics 6 (4): 1–38. DOI: 10.1257/mac.6.4.1Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D74 Conflict; Conflict Resolution; Alliances
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O19 International Linkages to Development; Role of International Organizations
- Q02 Global Commodity Markets
- Q34 Natural Resources and Domestic and International Conflicts