American Economic Journal: Applied Economics
no. 4, October 2011
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,
Miguel, Edward, and Shanker Satyanath.
"Re-examining Economic Shocks and Civil Conflict."
American Economic Journal: Applied Economics,
Conflict; Conflict Resolution; Alliances
Business Fluctuations; Cycles
Macroeconomic Analyses of Economic Development
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence