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Economics of Conflict

Paper Session

Saturday, Jan. 6, 2018 12:30 PM - 2:15 PM

Marriott Philadelphia Downtown, Meeting Room 409
Hosted By: Middle East Economic Association
  • Chair: Jeffrey Nugent, University of Southern California

The Economics of Conflict

Nora Ann Colton
University of East London


Historically, poverty in the Muslim Middle East was a rallying call for socialist and nationalist forces until their demise under single-party authoritarian regimes in the post-colonial period. Anti-colonial voices were led by young army officers who used the language of nationalism, socialism, and political and economic empowerment. These groups were mainly composed of middle class and lower class urban workers and peasants.
In contrast, since its inception in the 1960s, Islamic militancy has been a movement that has found its membership among the elite of Arab society. Some of the brightest and more educated young Muslim men have led the mainstream and militant Islamist movement from its birth until the 1980s. Although urban middle class activists joined the Islamist movement, initially the movement was not driven and shaped by socioeconomic factors. There is empirical evidence showing that ideology and Islamic legitimacy were the variables behind the rise and evolution of the militant Islamic movement. This paper will explore the socio-economic factors that contribute to the rise of Islamic militancy as we are currently seeing it manifested through such groups such as Isis. One of the dividing points within Muslim societies today continues to be the widening socioeconomic divide between a very tiny elite and impoverished populations in urban neighborhoods in the Arab world coupled with a youth bulge. The paper hopes to not only provide primary data and information on this topic, but to proffer a framework of analysis that examines both the demand and supply side of such social movements in the context of the Middle East. The demand-side variables will focus on the socio-economic crisis that is taking place in many Middle Eastern cities while the supply-side variables will emphasis the social networks and resources available for movements to mobilize.

Muslim Youth Unemployment and Expat Jihadism - Bored to Death?

Moamen Gouda
Hankuk University of Foreign Studies
Marcus Marktanner
Kennesaw State University


Empirical studies analyzing the push factors of expat jihadism are scarce and typically give contradictory results. We hypothesize that youth unemployment, as opposed to overall unemployment, is a significant determinant of foreign fighters flow to join Islamic State (IS). Moreover, we also consider the interaction between youth unemployment and the Muslim population share as another meaningful variables affecting expat jihadism. Controlling for several variables including GDP per Capita; Gini; geographical proximity; the share of manufactures and services as a percentage of GDP; Polity score; and fractionalization, we provide strong evidence for the hypothesis that Muslim youth unemployment is a driver of expat jihadism not only for Muslim-majority countries, but globally.

Do Israeli Settlements Radicalize Palestinians?

Sami Hasan Miaari
Tel Aviv University


Political and economic grievances are a key source of animosity between groups but little systematic evidence exists on the sources of such grievances. This paper helps fill this gap by examining the impact of Israeli settlements in the Palestinian territories on Palestinian attitudes towards the conflict and towards Israel. Since it took control of the West Bank and Gaza in 1967 the government of Israel has been setting up and expanding Jewish settlements in the Palestinian territories. The analysis addresses the potential endogeneity of the settlements’ location and growth using a large array of control, instrumental variables as well as identification methods. The results suggest that an addition of one thousand Israeli settlers located within one kilometer from a Palestinian locality reduces the locality’s support for more moderate factions by between 0.5 and 0.6 percentage points. We argue that this effect is important to explain the victory of the radical faction Hamas in the 2006 Palestinian elections. At the district level the same change in settlers’ population increases the probability of a Palestinian supporting violence against any Israeli target by 1.5 and against Israeli civilians (including also the settlers) by 4 percentage points. We also show that the evacuation of settlements increased the Palestinian support for moderate factions between the 1996 and 2006 elections and reduced the Palestinian support for violence. We provide suggestive evidence that it is mainly the increased competition for scarce natural resources, particularly land and water, that drives the radicalization effects of the settlements.

Grief and Greed: A Dynamic Model of Civil War

Raimundo Soto
Pontifical Catholic University of Chile


This paper makes two contributions to the literature on resource curse and violent civil conflicts. First, I build a model of the hazard of armed civil conflict as a manifestation of the natural resource curse (greed) as well as the distance between the policy choices of the government and the opposition (grief). The government offers a bundle of policy choices and a fraction of the resource rents. Contrary to the existing literature, I endogenize the political support for an authoritarian regime based on the uncertainty of interest groups on their relative share of the resource rent: whenever the public perceives that the government is not giving them a fair share of the resource rents, they would mount a rebellion and will be successful with a certain probability. Second, I use recent advances in econometric theory to estimate a dynamic, discrete variable, panel-data model of the probability of observing an armed civil conflict.
JEL Classifications
  • A1 - General Economics