As mentioned before in the section of literature review, several studies have shown that there is a close relationship between economic development and the risks to relapse to conflict, relationship that indicates that both growth and higher levels of income that growth cumulatively, bring risks down.
Nonetheless, economic theory has not yet reached a consensus on the economic impact of conflict. On one hand, neoclassical growth theory states that an economy recovers relatively quickly, and converges to its steady state. By the contrary other theoretical approaches argue that come back to their initial growth levels may take a long time, if we take into account that some resources like human capital recovers gradually. Or even a worse scenario, where some countries get trapped in a low …show more content…
In that sense, authors like Miguel, Satyanath and Sergenti (2004) used a rainfall variation as an instrumental variable for economic growth in 41 African countries during 1981–99, to conclude that “growth is strongly negatively related to civil conflict: a negative growth and that the impact of growth shocks on conflict is not significantly different in richer, more democratic, or more ethnically diverse countries” (p. 275).
For example in the case of Rwanda a country that has suffered the consequences of civil wars for decades, Serneels and Verpoorten (2012) using micro level data estimated that during the early 90s, the households and localities that experienced more intense conflict in Rwanda are lagging behind in terms of consumption six years after the conflict, reaching a robust result in terms of the endogeneity of violence. Equally, they found that the returns to land and labour are considerably different between territories with the present of low and high conflict
Nonetheless, economic theory has not yet reached a consensus on the economic impact of conflict. On one hand, neoclassical growth theory states that an economy recovers relatively quickly, and converges to its steady state. By the contrary other theoretical approaches argue that come back to their initial growth levels may take a long time, if we take into account that some resources like human capital recovers gradually. Or even a worse scenario, where some countries get trapped in a low …show more content…
In that sense, authors like Miguel, Satyanath and Sergenti (2004) used a rainfall variation as an instrumental variable for economic growth in 41 African countries during 1981–99, to conclude that “growth is strongly negatively related to civil conflict: a negative growth and that the impact of growth shocks on conflict is not significantly different in richer, more democratic, or more ethnically diverse countries” (p. 275).
For example in the case of Rwanda a country that has suffered the consequences of civil wars for decades, Serneels and Verpoorten (2012) using micro level data estimated that during the early 90s, the households and localities that experienced more intense conflict in Rwanda are lagging behind in terms of consumption six years after the conflict, reaching a robust result in terms of the endogeneity of violence. Equally, they found that the returns to land and labour are considerably different between territories with the present of low and high conflict