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The Economic Cost of Secessionist Conflict in the Philippines

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  • Rhea Molato

Abstract

This paper estimates the e¤ect of secessionist conflict in the Philippines on the country's economic output. It uses the synthetic control method (SCM) to generate the counterfactual path of per capita real GDP that the Philippines could have achieved in the absence of secessionist conflict. The effect is measured as the di¤erence between actual and synthetic levels of economic output. This paper finds a negative and growing effect of the conflict on the Philippine economy as the conflict persists through time. These estimates are validated by the standard method of inference for studies using the SCM.

Suggested Citation

  • Rhea Molato, 2015. "The Economic Cost of Secessionist Conflict in the Philippines," Working Papers tax-mpg-rps-2015-05, Max Planck Institute for Tax Law and Public Finance.
    • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2015-05
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    File URL: http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2015-05.pdf
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    References listed on IDEAS

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    1. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    2. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
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    4. James C. Murdoch & Todd Sandler, 2002. "Economic Growth, Civil Wars, and Spatial Spillovers," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(1), pages 91-110, February.
    5. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2011. "Synth: An R Package for Synthetic Control Methods in Comparative Case Studies," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 42(i13).
    6. Llussá, Fernanda & Tavares, José, 2011. "Which terror at which cost? On the economic consequences of terrorist attacks," Economics Letters, Elsevier, vol. 110(1), pages 52-55, January.
    7. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    8. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191.
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    Cited by:

    1. Joseph J. Capuno, 2017. "Violent conflicts in ARMM: Probing the factors related to local political, identity, and shadow-economy hostilities," UP School of Economics Discussion Papers 201707, University of the Philippines School of Economics.

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    More about this item

    Keywords

    secession; conflict; economic development;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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