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ON THE CONFLICT–POVERTY NEXUS
Author(s) -
BLOMBERG S. BROCK,
HESS GREGORY D.,
THACKER SIDDHARTH
Publication year - 2006
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.2006.00170.x
Subject(s) - nexus (standard) , investment (military) , economics , poverty , consumption (sociology) , panel data , construct (python library) , capital (architecture) , human capital , development economics , economic growth , political science , politics , econometrics , geography , sociology , social science , programming language , archaeology , computer science , law , embedded system
We develop a model to explore the inter‐relationships between conflict and economic activity. We construct a simple two‐period model where consumption and investment decisions are made in the presence of governments who consider initiating diversionary conflict to raise their chances of remaining in power. Economies with selfish leaders and lower gains from capital formation may fall prey to engaging in avoidable conflicts thereby lowering investment and hence future growth. Using panel data for over 152 countries from 1950 to 2000, we find evidence for conflict lowering economic growth and, after conditioning on the initial conditions of geography, private, public, and human capital investment, lower growth raising the likelihood of conflict. These results are broadly consistent with our model.