IDEAS home Printed from https://ideas.repec.org/a/aea/aejmac/v6y2014i4p1-38.html
   My bibliography  Save this article

Economic Shocks and Conflict: Evidence from Commodity Prices

Author

Listed:
  • Samuel Bazzi
  • Christopher Blattman

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.

Suggested Citation

  • Samuel Bazzi & Christopher Blattman, 2014. "Economic Shocks and Conflict: Evidence from Commodity Prices," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 1-38, October.
    • Handle: RePEc:aea:aejmac:v:6:y:2014:i:4:p:1-38
    Note: DOI: 10.1257/mac.6.4.1
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mac.6.4.1
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/mac/data/0604/2013-0226_data.zip
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/mac/app/0604/2013-0226_app.pdf
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/mac/ds/0604/2013-0226_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Paul Cashin & Hong Liang & C. John McDermott, 2000. "How Persistent Are Shocks to World Commodity Prices?," IMF Staff Papers, Palgrave Macmillan, vol. 47(2), pages 1-2.
    2. Paul Cashin & C. John McCDermott, 2002. "The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability," IMF Staff Papers, Palgrave Macmillan, vol. 49(2), pages 1-2.
    3. Kalina Manova & Zhiwei Zhang, 2012. "Export Prices Across Firms and Destinations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 379-436.
    4. Montfort Mlachila & Paul Cashin & Cleary Haines, 2013. "Caribbean bananas: The macroeconomic impact of trade preference erosion," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(2), pages 253-280, March.
    5. Antonio Ciccone, 2011. "Economic Shocks and Civil Conflict: A Comment," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 215-227, October.
    6. Antonio Ciccone, 2013. "Estimating the Effect of Transitory Economic Shocks on Civil Conflict," Review of Economics and Institutions, Università di Perugia, vol. 4(2).
    7. World Bank, 2009. "World Development Indicators 2009," World Bank Publications - Books, The World Bank Group, number 4367.
    8. Deaton, Angus & Miller, Ron, 1996. "International Commodity Prices, Macroeconomic Performance and Politics in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 5(3), pages 99-191, October.
    9. Nuxoll, Daniel A, 1994. "Differences in Relative Prices and International Differences in Growth Rates," American Economic Review, American Economic Association, vol. 84(5), pages 1423-1436, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ciccone, Antonio, 2018. "International Commodity Prices and Civil War Outbreak: New Evidence for Sub-Saharan Africa and Beyond," CEPR Discussion Papers 12625, C.E.P.R. Discussion Papers.
    2. Markus Brückner & Antonio Ciccone, 2011. "Rain and the Democratic Window of Opportunity," Econometrica, Econometric Society, vol. 79(3), pages 923-947, May.
    3. Burke Paul J., 2012. "Economic Growth and Political Survival," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-43, March.
    4. Markus Brückner & Antonio Ciccone, 2010. "International Commodity Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Economic Journal, Royal Economic Society, vol. 120(544), pages 519-534, May.
    5. Camille Laville, 2018. "The econometrical causal analysis of internal conflicts: The evolutions of a growing literature [L’analyse économétrique des conflits internes par l’approche causale : les évolutions d’une littérat," Working Papers hal-01940461, HAL.
    6. Cashin, Paul & Cespedes, Luis F. & Sahay, Ratna, 2004. "Commodity currencies and the real exchange rate," Journal of Development Economics, Elsevier, vol. 75(1), pages 239-268, October.
    7. Markus Bruckner & Antonio Ciccone, 2010. "International Commodities Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Working Papers 1008, BBVA Bank, Economic Research Department.
    8. Mr. Aasim M. Husain & Chakriya Bowman, 2004. "Forecasting Commodity Prices: Futures Versus Judgment," IMF Working Papers 2004/041, International Monetary Fund.
    9. Thiemo Fetzer, 2020. "Can Workfare Programs Moderate Conflict? Evidence from India," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 3337-3375.
    10. Jørgen Juel Andersen & Frode Martin Nordvik & Andrea Tesei, 2022. "Oil Price Shocks and Conflict Escalation: Onshore versus Offshore," Journal of Conflict Resolution, Peace Science Society (International), vol. 66(2), pages 327-356, February.
    11. Augustin Kwasi Fosu, 2010. "The Global Financial Crisis and Development: Whither Africa," WIDER Working Paper Series wp-2010-124, World Institute for Development Economic Research (UNU-WIDER).
    12. Cécile Couharde & Vincent Géronimi & Armand Taranco, 2012. "Les hausses récentes des cours des matières premières traduisent-elles l'entrée dans un régime de prix plus élevés ?," Revue Tiers-Monde, Armand Colin, vol. 0(3), pages 13-34.
    13. Gabriel Srour, 2004. "Economic Integration, Sectoral Diversification, and Exchange Rate Policy in a Developing Economy," IMF Working Papers 2004/060, International Monetary Fund.
    14. Caroline T. Witte & Martijn J. Burger & Elena Ianchovichina, 2020. "Subjective Well‐Being and Peaceful Uprisings," Kyklos, Wiley Blackwell, vol. 73(1), pages 120-158, February.
    15. Thiemo Fetzer, 2014. "Can Workfare Programs Moderate Violence? Evidence from India," STICERD - Economic Organisation and Public Policy Discussion Papers Series 053, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    16. Mathieu Couttenier & Raphael Soubeyran, 2014. "Drought and Civil War In Sub‐Saharan Africa," Economic Journal, Royal Economic Society, vol. 124(575), pages 201-244, March.
      • Couttenier, Mathieu & Hofstetter, Annie & Soubeyran, Raphael, 2013. "Drought and civil war in sub-Saharan Africa," INRAE Sciences Sociales, Institut national de recherche pour l'agriculture, l'alimentation et l'environnement (INRAE), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2), vol. 2013, pages 1-6, March.
    17. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2020. "The effects of conflict budget on the intensity of conflict: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 240-258, March.
    18. Liu, De-Chih & Chang, Yu-Chien, 2022. "Systematic variations in exchange rate returns," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 569-583.
    19. Phoebe W. Ishak & Mohammad Reza Farzanegan, 2022. "Oil price shocks, protest, and the shadow economy: Is there a mitigation effect?," Economics and Politics, Wiley Blackwell, vol. 34(2), pages 298-321, July.
    20. Gerling Lena, 2017. "Urban Protests, Coups d’état and Post-Coup Regime Change," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 23(4), pages 1-8, December.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Economic Shocks and Conflict: Evidence from Commodity Prices (AEJ:MA 2014) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmac:v:6:y:2014:i:4:p:1-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.