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The Economic Effects of Genocide: Evidence from Rwanda

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  • Roland Hodler

Abstract

Cross-country studies on the economic consequences of internal political violence typically find short-run effects that are not very large, and no evidence for full economic recovery. We study the economic impact of the Rwandan genocide in 1994, which has been one of the most intense events of political violence since World War II. More precisely, we estimate its effect on economic development using the synthetic control method and addressing data quality issues that have been a concern in the literature. We find a 58% decrease in GDP in 1994. This effect still corresponds to a decrease in GDP per capita of around 31% when taking into account that 800,000 people were killed and that around two million fled the country during the genocide. We further provide strong evidence that Rwanda’s economy was then catching up with the estimated counterfactual GDP it would have had in absence of the genocide, with the gap closing after 17 years. When focusing on the effects on the Rwandan exports as reported by the importing countries, we find similar short-run effects but somewhat slower recovery. We finally show that agriculture was less severely hit by the genocide than the industry and service sectors, and that it also recovered much more quickly.

Suggested Citation

  • Roland Hodler, 2019. "The Economic Effects of Genocide: Evidence from Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 28(1), pages 1-17.
    • Handle: RePEc:oup:jafrec:v:28:y:2019:i:1:p:1-17.
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    File URL: http://hdl.handle.net/10.1093/jae/ejy008
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    Citations

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    Cited by:

    1. Mohammad Reza Farzanegan & Mohammad Ali Kadivar, 2023. "The effect of Islamic revolution and war on income inequality in Iran," Empirical Economics, Springer, vol. 65(2), pages 1007-1026, August.
    2. Becker, Sascha O. & Mukand, Sharun & Yotzov, Ivan, 2022. "Persecution, pogroms and genocide: A conceptual framework and new evidence," Explorations in Economic History, Elsevier, vol. 86(C).
    3. Martin Philipp Heger & Eric Neumayer, 2022. "Economic legacy effects of armed conflict: Insights from the civil war in Aceh, Indonesia," Conflict Management and Peace Science, Peace Science Society (International), vol. 39(4), pages 394-421, July.
    4. Joseph Mawejje & Patrick McSharry, 2021. "The economic cost of conflict: Evidence from South Sudan," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 1969-1990, November.
    5. Coutts, Alexander, 2024. "The age of consequences: Unraveling conflict's impact on social preferences, norm enforcement, and risk-taking," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 48-67.
    6. Josh Matti, 2024. "The Long‐Term Economic Impact of Abenomics: Evidence from the Synthetic Control Method," Economic Papers, The Economic Society of Australia, vol. 43(1), pages 10-33, March.

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