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American Economic Journal: Applied Economics: Vol. 3 No. 4 (October 2011)

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Re-examining Economic Shocks and Civil Conflict

Article Citation

Miguel, Edward, and Shanker Satyanath. 2011. "Re-examining Economic Shocks and Civil Conflict." American Economic Journal: Applied Economics, 3(4): 228-32.

DOI: 10.1257/app.3.4.228

Abstract

Miguel, Satyanath, and Ernest Sergenti (2004), henceforth MSS, show that economic growth is negatively related to civil conflict in Africa, using annual rainfall variation as an IV for growth. Antonio Ciccone (2011) argues that thanks to rainfall's mean-reverting nature, rainfall levels are preferable to annual changes. We make three points. First, MSS's findings hold using rainfall levels as instruments. Second, Ciccone (2011) does not provide theoretical justification for preferring rainfall levels. Third, the first-stage relationship between rainfall and growth is weaker after 2000, suggesting that alternative instruments are needed when studying recent conflicts. We highlight the accumulating microeconomic evidence that adverse economic shocks lead to political violence. (JEL D74, E32, O11, O17, O47)

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Authors

Miguel, Edward (U CA, Berkeley)
Satyanath, Shanker (NYU)

JEL Classifications

D74: Conflict; Conflict Resolution; Alliances
E32: Business Fluctuations; Cycles
O11: Macroeconomic Analyses of Economic Development
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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