Economics 172 Issues in African Economic Development Lecture 28 May 4, 2006.

Economics 172Issues in African Economic Development

Lecture 28

May 4, 2006

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Conflict and Economic Development• War and conflict could be critical for understanding

cross-country economic development patterns (Drèze 1999, World Bank 2003)

• Conflict may be particularly important for Sub-Saharan Africa, where two-thirds of countries experienced armed conflicts in the 1980-1990s

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Existing research• However, recent empirical studies have not found

persistent local effects of war damage on population (Davis and Weinstein 2002, Brakman et al. 2004) or economic performance (Miguel and Roland 2005)

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Existing research• However, recent empirical studies have not found

persistent local effects of war damage on population (Davis and Weinstein 2002, Brakman et al. 2004) or economic performance (Miguel and Roland 2005)

• But existing empirical work does not study the impact of war on institutions – the theoretical channel most likely to have persistent economic growth effects (e.g., by shifting the aggregate production function scale parameter, A)

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War and Local Institutions in Sierra Leone• After Siaka Stevens stepped down in 1985, and the total

economic collapse of the 1980s, Sierra Leone experienced a brutal civil conflict 1991-2002

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War and Local Institutions in Sierra Leone• After Siaka Stevens stepped down in 1985, and the total

economic collapse of the 1980s, Sierra Leone experienced a brutal civil conflict 1991-2002

• Bellows and Miguel (2006) estimate the relationship between conflict intensity and local institutional, political and social outcomes in Sierra Leone

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The Sierra Leone Civil War (1991-2002)• Fighting started in the eastern Liberian border but

eventually affected the entire country– Radical dissidents trained in Libya, led by Foday

Sankoh, formed the Revolutionary United Front (RUF). RUF was allied with Charles Taylor in Liberia

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The Sierra Leone Civil War (1991-2002)• Fighting started in the eastern Liberian border but

eventually affected the entire country– Radical dissidents trained in Libya, led by Foday

Sankoh, formed the Revolutionary United Front (RUF). RUF was allied with Charles Taylor in Liberia

• The Sierra Leone Army (SLA) was corrupted by the mid-1980s, with officer positions going to the highest bidder. Collusion between rebel Revolutionary United Front (RUF) and SLA meant that most violence was directed against civilians

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Consequences of the Sierra Leone war• RUF attackers massacred chiefs and elders, destroyed

public buildings, displaced civilians– Recruits often attacked their home villages. Many

children were forcibly recruited

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Consequences of the Sierra Leone war• RUF attackers massacred chiefs and elders, destroyed

public buildings, displaced civilians– Recruits often attacked their home villages. Many

children were forcibly recruited

• The Civilian Defense Forces (CDF) were locally organized and financed militias that successfully fought off the RUF/SLA in some areas– CDF’s were organized around traditional secret “Poro”

societies, including Mende hunter groups

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Causes of the war• Diamond smuggling financed group leaders and arms

purchases, and armed groups often fought over control of the mines

• Deep underlying grievances against the state also fed the violence: Sierra Leone was second to last in the 1990 UN Human Development Index, and public services had completely fallen apart

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Empirical approach

• Investigate association of conflict with postwar socioeconomic outcomes, and with local institutional and social outcomes (village meetings, voter registration, community groups, religiosity) in 2004-5– We condition on geographic controls, location of

diamond mines, district fixed effects, prewar socioeconomic characteristics

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Empirical approach

• Investigate association of conflict with postwar socioeconomic outcomes, and with local institutional and social outcomes (village meetings, voter registration, community groups, religiosity) in 2004-5– We condition on geographic controls, location of

diamond mines, district fixed effects, prewar socioeconomic characteristics

• Caveat 1: the location of violence is not random• Caveat 2: nation-wide effects of the war cannot be

estimated using this identification strategy

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Where was the fighting in Sierra Leone?

• Local diamond mines, higher prewar incomes are both positively associated with local attacks and battles (Table 2), “greed” as a driving factor

• Prewar 1989 school enrollment (5-18 year olds) is negatively correlated with conflict victimization– Organization of CDFs better there?

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Conflict intensity and local institutions

• Conflict victimization is positively associated with several measures of postwar political mobilization – including attendance at community meetings, voter registration, community group membership– But there is no significant relationship between either

conflict measure and postwar 2004 socioeconomic outcomes (per capita consumption, schooling, child nutrition)

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-.4

-.2

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tten

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e (

resi

dual

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-.2 0 .2Conflict victimization index (residuals)

Meeting Attendance (residuals) Fitted values

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The bottom line

• We find no adverse effects of civil war violence in Sierra Leone on local living standards or institutions

– Several measures of political mobilization / collective action are somewhat better in areas that experienced more violence during the conflict

– 60% of 2005 IRCBP respondents claim that the war positively impacted community cooperation

– Institutions, norms, and organizations forged during war persist into the postwar period

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Implications

• More speculatively: did the Sierra Leone civil war generate new – and possibly stronger – institutions?

• Keen (2005) claims the war increased political awareness and mobilization, especially for youths

• Ferme (2001, p. 228): “[Sierra Leoneans] have sometimes turned [social instability] into a creative, though violent, opportunity to refashion themselves vis-à-vis their own institutions”

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Sierra Leone GDP Per Capita

0

50

100

150

200

250

2000 2001 2002 2003 2004

Year

US

$ P

PP Sierra Leone

GDP PerCapita

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Map of Africa