Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan

35 Pages Posted: 12 Mar 2009

See all articles by Jo Thori Lind

Jo Thori Lind

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Karl O. Moene

University of Oslo - Department of Economics

Fredrik Willumsen

University of Oslo - Department of Economics

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Date Written: March 2009

Abstract

We show that the recent rise in Afghan opium production is caused by violent conflicts. Violence destroys roads and irrigation, crucial to alternative crops, and weakens local incentives to rebuild infrastructure and enforce law and order. Exploiting a unique data set, we show that Western hostile casualties, our proxy for conflict, have strong impact on subsequent local opium production. This proxy is shown to be exogenous to opium. We exploit the discontinuity at the end of the planting season: Conflicts have strong effects before and no effect after planting, assuring causality. Effects are strongest where government law enforcement is weak.

Keywords: conflict, narcotics production, resource curse, Afghanistan

JEL Classification: D74, H56, K42, O1

Suggested Citation

Lind, Jo Thori and Moene, Karl O. and Willumsen, Fredrik, Opium for the Masses? Conflict-Induced Narcotics Production in Afghanistan (March 2009). CESifo Working Paper Series No. 2573, Available at SSRN: https://ssrn.com/abstract=1357242

Jo Thori Lind (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Karl O. Moene

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47 22855130 (Phone)
+47 22855035 (Fax)

Fredrik Willumsen

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

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