Ethnic Conflict, Civil War and Cost of Conflict: Volume 17

The history of mankind is full of conflict, particularly international conflicts. Many studies have been made about their causes and effects. However, since the 1990s, almost all conflict and wars in the world are not between nations but within it. Although there are about 200 nation states in the United Nations, many of them are very unstable and in the process of disintegration. The causes are mainly economic, social, political and religious. Conflicts in the future will be more intranational rather than international.

The study of war and peace is nowadays becoming a complex topic drawing from different disciplines and applying different methodologies. This book collects 10 studies on conflict and its pernicious consequences. The appropriate scientific field for this set of studies is the peace economics as defined in Isard (1994), Arrow (1995) and Caruso (2010). In particular, Peace Economics is a sub-field of Peace Science and it is generally concerned with (1) the economic determinants of actual and potential conflicts; (2) the impact of conflict on welfare and on the economic behaviour of societies; (3) the use of economic measures to cope with and control conflicts whether economic or not. Central to this field are analyses of conflicts amongst nations, regions and other communities of the world; measures to control (deescalate) arms races and achieve reduction in military expenditures; programmes and policies to utilize resources thus released for more constructive purposes. Put briefly, the main object of peace economics is the study of conflict and conflict resolution in different forms. In particular, the contents of this book are mainly on the positive ‘side’ of Peace Economics, which emphasizes the study of conflict and its consequences. In particular, in the recent years, a growing economic literature has uncovered both the economic determinants and consequences of actual intra-state conflicts. This book is intended to be a contribution to this literature. It gathers both theoretical and empirical contributions.

Purpose – The forced rural–urban migration in Colombia is a phenomenon that could be seen as the collateral damage of an armed conflict that takes place mainly in rural areas. Nevertheless, there is a significant percentage of cases in which the main reason to flee is a direct threat by an armed actor. This chapter proposes a possible reason why an illegal armed group displaces population from rural to urban areas.

Design/methodology/approach – A two-stage game theoretical model is considered, in which the central government struggles over the control of a region with the insurgents. In the first stage, rebels have the choice of forcing a proportion of peasants out of the rural areas or not. In the second stage, both players choose the level of military expenditure.

Findings – It is found that, under certain circumstances, the displaced population could be used by the insurgents as a means to deter the central government from fighting. This model predicts that the larger the value rebels attached to the contested region, the higher the proportion of forced migrants. It is also consistent with the idea that if the central government can commit to warfare, then forced migration will be useless for rebels.

Originality/value – This chapter explores a new rationale for forced displacement which consists in lowering government's incentives to fight for a region, by reducing the remaining population which in turn reduces income for the government.

This chapter presents first a theoretical model of conflict between two agents characterised by a two-sector economy. In a contested sector, two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. Eventually, tradable goods made of both butter and ice-cream produced by conflicting parties are sold to the rest of the world. Therefore, the opportunity cost of conflict depends also on the relative profitability of contested and uncontested production. In particular, productivity of uncontested production and profitability of contested sectors are countervailing forces. The empirical section focused on a panel of Sub-Saharan African countries for the period 1995–2006. Results are not fully conclusive. However, there is robust evidence that prices of manufactures (interpreted as the uncontested ice-cream) are negatively associated with the likelihood of a civil war. Eventually, international price of manufactures is also associated with a higher GDP per capita growth rate. The concluding remark seems to be that an increase in world prices of manufactures would make civil wars less likely.

Communal violence requires a prior existence of radicalism. The chapter shows that the degree of extremism of one group can increase or decrease in response to that of the other. Lootable wealth unambiguously raises radicalism. It is not the absolute level of income but the difference between peacetime income and that of conflict periods that determines the magnitude of radicalism.

Purpose – Rural–urban divides characterize many violent internecine conflicts. The lack of rural development is often cited as an underlying structural cause of this phenomenon, and thus strengthening rural–urban linkages is often touted as a way of dismantling the structural conditions for internecine violence. This chapter attempts to identify how both the strength and the form of rural–urban linkages influence the intensity of insurgent violence.

Methodology – Using geographic information systems, this chapter analyzes the intensity of specific violent attacks by rural insurgent groups in Maoist India as a function of rural–urban linkages and transportation network redundancy.

Findings – It finds that the degree of interconnectivity in transportation networks is a more robust determinant of restraint among violent actors than the sheer strength of rural–urban linkages. Production networks characterized by highly networked road systems are more likely to incent restrained behavior among rebel groups, which may be dependent on taxation or extortion through obstruction.

Limitations/implications – The chapter quantitatively analyzes a phenomenon, but does not identify causal mechanisms driving it. The policy implication is that providing transportation infrastructure within rural areas may be a more effective guard against insurgent violence than connecting urban and rural areas.

Originality – The chapter makes a methodologically unique link between the large existing literature on rural–urban linkages, and the growing literature on trade networks in violent conflict.

This chapter focuses on the Maoist insurgency in the 75 districts of Nepal and tries to analyze the insurgency in a comparative perspective. We compare the 75 districts with the aim to address the following questions: Why does an insurgency emerge in certain areas? How is it linked to economic, social, or political factors? Why does an insurgency show a robust presence in some districts but fail to do likewise in others? We attempt to answer these questions by conducting multivariate regressions using longitudinal data to test our primary hypothesis that the onset of an insurgency and the continuation are functions of the same factors. We examine insurgency within one country, Nepal, and test our model in Nepal's 75 districts, in a single country context, using available data on the 10-year-long insurgency. We break down the Nepalese insurgency into two parts: the onset and the continuation. Our findings indicate that regions predominantly polarized by caste are more prone to the onset of insurgency than any other factor. Higher literacy rate, a proxy for government efficacy, renders insurgency less feasible, and difficult terrain has no impact whatsoever. However, after the onset, many of the explanatory variables are no longer significant for the continuation of the insurgency and grievances alone tend to be meaningless.

We empirically analyze the link between state capacity and civil conflict via the manufacturing sector, which is the source of wealth for an emerging new elite interested in obtaining political representation, and is the outcome of a new political equilibrium more in tune with capital accumulation. This raises the cost of civil conflict, reducing its probability of occurrence. We find evidence in favor of our hypothesis in panels of African and Latin American countries.

The consequences of civil war have been widely analyzed. However, one of its important effects, the human cost of the conflict, remains marginally investigated. Indeed, most of recent literature has focused on the numbers of dead and wounded, while little scope has been given to survivors’ health. Given that the survivors are those who bear the burden of reconstruction, it is crucial to evaluate the health costs of civil conflict to develop and implement proper economic policies. This chapter is an attempt in this direction.

The aim is to assess the impact of the Mozambican Civil War on the long-term health of adult women, measured in terms of their height-for-age z-score (HAZ). Toward this end, two sets of data are used: the household survey data derived from Demographic and Health Survey (DHS+ 2003) which provides a set of anthropometric measures combined with an original geo-referenced event dataset of battles and military actions that took place during this war.

I find that women who were exposed to the conflict during the early stages of their lives display weaker health on average than other women, as reflected by their lower HAZ. This negative effect is correlated with age at the time of exposure to the civil war.

Furthermore, this chapter indicates that the use of the medical concept of infancy–childhood–puberty curves is a suitable tool for estimating the impact of age of entry into the conflict and provides some evidence of the channels through which health is affected by civil conflicts.

There is a substantial body of research on the calculation of the costs of conflict, but so far no satisfactory methodology has been proposed that is able to combine all potential channels in one single analysis. This chapter uses the existing literature and its problems to propose a methodology for doing so.

The specific problems addressed in this study include the measurement of welfare, the imputation of missing data, the validity of the econometric techniques used in the estimation of conflict costs, the differentiation of existing conflict databases, and the possibility of both direct and nondirect effects. These challenges are described in detail in this chapter and a comprehensive methodological road map is proposed to be able to estimate the global economic costs of conflict. This contribution is an important continuation of our research agenda with regard to the calculation of the global economic costs of conflict.

Social environments can be presented as complex systems that are continually changing their structures in a nonlinear fashion. However, this notion of complexity is commonly disregarded in the study of strategic interactions between competing actors. One of the major reasons for this is the inability to collect sufficient empirical data in order to adequately study decision making under dynamic circumstances. In order to cope with this problem an online simulator module is being developed. This module allows researchers to create interactive simulators that confront human subjects with virtual social environments designed by the researcher. Unlike previous simulator modules, this one provides a high degree of flexibility and imposes fewer restrictions on the simulated environment and the manner in which decisions can be made. Thus, the subjects operating this simulator can pursue multiple policies simultaneously rather than choosing between alternatives. They can make decisions in real time and receive feedbacks also at anytime, including delayed feedbacks. Decisions that are made can alter the environment, resulting in changing payoffs and the policies that are available. It is also possible to provide subjects operating the simulator with different formats for presenting information. Another significant feature is the capability to monitor when choices are made and what information is being analyzed and when it is being observed. In comparison to other simulator modules that have been developed in the past, this one is not based on an old simulation language but is completely newly programmed in a language designed for online interactions.

Purpose – For the purpose of forming a nation from the independent regions, the desirability is examined whether first we must seek economic integration of the regions or first military integration of the regions. The comparison of the “all-volunteer army system” and the “draft system” is also attempted.

Design/methodology/approach – Assuming the two regions facing the assault by an intruder, the Walrasian general equilibrium theory in economics is utilized for the comparison. For the construction of armed forces, Lindahl mechanism is introduced. The desirability is evaluated by the comparison of final utilities for the two integration processes achieved from the computation of equilibrium prices and burden shares for military expenses.

Findings – It is found that the all-volunteer army system is more desirable than the draft system in any of the two integrations. Furthermore, “first, the economic integration of the two regions, then the military integration” is more desirable than “first, the military integration of the two regions, then the economic integration.”

Research limitations/implications – Parameters in production and utility functions as well as the population sizes are specified numerically, although the specification is made randomly. The present simulation provides a starting point for further research with general (unspecified) production and utility functions.

Originality/value – This simulation provides a theoretical support for the actual design of the European integration. The originality consists in the derivation of the conclusion from the formulation of a purely theoretical model, which assumes individuals' maximizing behavior.

Raul Caruso, educated in Naples, Leuven and Milan, is currently senior researcher at the Institute of Economic Policy, Università Cattolica del Sacro Cuore (Italy) where he is also serving as adjunct professor of international economics. He is also visiting professor at Warsaw University (Poland). He has also been visiting professor at Massachusetts Institute of Technology (MIT) (USA), Hiroshima University (Japan), Kazakh Humanitarian Law University (Kazakhstan) and Novosibirsk State University (Russian Federation). His main research interests are peace economics, international political economy, economics of crime and sport economics. He has published on contest theory, sport economics, economic interpretation of terrorism, economic causes of wars and international economic sanctions. He is the executive coordinator of Network of European Peace Scientists (NEPS). He is also editor in chief of Peace Economics, Peace Science and Public Policy.