War! What is it Good for?
Ryan A. Compton
University of Manitoba
Noel D. Johnson
George Mason University - Department of Economics; George Mason University - Mercatus Center
California State University, Long Beach - Department of Economics
March 25, 2009
BE Press: Peace Economics, Peace Science, and Public Policy, Vol. 16, No. 1
Whatever gains may come from fighting wars, economic growth is not among them. We examine the long-run impact of interstate conflict on real GDP per capita for a cross section of countries between 1960 and 2000. We construct a fatality-weighted conflict variable that accounts for both the severity and endogeneity of individual confrontations. We include our conflict measure in a deep determinants income regression in which we control for trade, institutions and geography. We find that a 10 percent increase in fatality-weighted conflict over the period 1960 to 2000 results in an average decrease of 1.2 to 1.6 percent in 2000 real GDP per capita.
Keywords: Conflict, War, Growth
JEL Classification: D74, F51, O10
Date posted: April 1, 2009 ; Last revised: March 20, 2012