Economic Consequences of Wars: Evidence from Landmine Contamination in Mozambique

This paper evaluates the economic returns to improved households access to infrastructure, public services and land in the context of a large landmineclearance program in post-war Mozambique. The International Campaign to Ban Landmines production and use estimates that there are more than 80 billion landmines in the ground in more than 80 countries. Despite the scale of the problem and large investments by OECD countries to clear mines in low income countries, the economic consequences of landmine contamination have been so far unexamined by economists working on the economics of wars, perhaps due to the lack of data thus far. The evaluation uses a unique dataset on landmine contamination intensity covering 126 Mozambican districts to evaluate the causal impact of landmine contamination on income and welfare. The method uses a difference-in-difference estimator to correct for selection in landmine placement. I find large and statistically significant effects of landmine contamination on poverty (in level and depth) and consumption per capita. Hence, the cost-benefit analysis indicates that despite the high cost to clear a mine under reasonable assumptions the program generates a positive return.