Investment and Institutions in Post-Civil War Recovery
- 11 Downloads
Theories of post-civil war recovery predict a ‘peace dividend’ via the re-accumulation of capital per worker. I suggest that such a recovery will occur only when quality institutions have been established. I couple data on civil wars from 1965 to 2000 with the measure of legal structure and protection of private property from the Economic Freedom of the World Index. The results from growth regressions using an interaction between an index of institutions, and investment/GDP confirm that weak institutions inhibit recovery in the post-conflict environment, providing empirical support for a model of conflict recovery via capital accumulation, conditional on institutions.
Keywordscivil war post-war recovery institutions investment peace dividend
JEL ClassificationsO11 O16 O43 O57 P48
- Barro, RJ and Lee, J-W . 1994: Sources of economic growth. Carnegie-Rochester Conference Series on Public Policy, Elsevier, 40 (1): 1–46.Google Scholar
- Beaudry, P, Collard, F and Green, DA . 2002: Decomposing the twin-peaks in the world distribution of output-per-worker. Working Paper No. 9240, NBER.Google Scholar
- Bhattacharya, R and Ghura, D . 2006: Oil and growth in the Republic of Congo. Working Paper No. 11/185, International Monetary Fund.Google Scholar
- Center for Systemic Peace. 2012: Polity IV. http://www.systemicpeace.org/, accessed 2 August 2013.
- Collier, P . 1995: Civil war and the economics of the peace dividend. Working Paper No. 95–8, Centre for the Study of African Economies, Oxford.Google Scholar
- Collier, P, Elliott, VL, Hegre, H, Hoeffler, A, Reynal-Querol, M and Sambanis, N (eds.) 2003: Breaking the conflict trap: Civil war and development policy. World Bank: Washington DC.Google Scholar
- Collier, P and Hoeffler, A . 2002: Greed and grievance in civil war. Working Paper No. 106, Centre for the Study of African Economies, Oxford. Retrieved from http://www.bepress.com/csae/paper160/, accessed 5 May 2012.
- David, AC, Bastos, FR and Mills, M . 2011: Post-conflict recovery: Institutions, aid, or luck? Working Paper No. 11/149, International Monetary Fund.Google Scholar
- Johnson, PA, Durlauf, SN and Temple, JRW . 2005: Growth econometrics. In: Aghion, P and Durlauf, SN (eds). The Handbook of Economic Growth. Elsevier: Amsterdam.Google Scholar
- Keefer, P . 2008: Insurgency and credible commitment in autocracies and democracies. World Bank Economic Review 22 (1): 33–61.Google Scholar
- Knight, M, Loayza, N and Villanueva, D . 1996: The peace dividend. Working Paper No. 1577, World Bank Policy Research, Washington DC.Google Scholar
- Rosenblum, MR . 2007: El Salvador (1979–1992). In: DeRouen, K, Jr and Heo, U (eds) Civil Wars of the World: Major Conflicts since World War II. ABC-CLIO: Santa Barbara, CA pp. 329–349.Google Scholar
- Simon, MV . 2007: Nicaragua (1978–1979 and 1980–1989). In: DeRouen, CJ and Heo, U (eds) Civil Wars of the World: Major Conflicts since World War II. ABC-CLIO: Santa Barbra, CA pp. 551–565.Google Scholar
- World Bank. 2011: Data retrieved from World Development Indicators Online Database, accessed 5 May 2012.Google Scholar