Economic Consequences of Conflict

An earlier version of this paper was presented at the annual meeting of APSA 2011. A different version of this paper was published as Kugler, T., K. Kang, J. Kugler, M. Arbetman, and J. Thomas. (2013) “Demographic & Economic Consequences of Conflict.” International Studies Quarterly 57 (1) : 1-12

18 Pages Posted: 24 Aug 2011 Last revised: 21 Oct 2015

See all articles by Kyungkook Kang

Kyungkook Kang

University of Central Florida

Jacek Kugler

Claremont Graduate University

Tadeusz Kugler

Roger Williams University

Date Written: December 13, 2013

Abstract

This research addresses a relatively unexplored but vitally important issue: How and why do nations recover after wars? Our goal is to identify the elements that systematically accelerate postwar recovery. We want to formally assess the impact of foreign aid and investment, human capital, demographic changes, and most importantly the political capacity of governments on post war recovery rates.

This inquiry is motivated by inconsistencies emerging from past empirical and theoretical works. Previous empirical work identified the existence of a Phoenix Factor among the most developed nations traumatized by major war (Germany, Japan, Italy, or France). Despite massive economic and demographic losses, these societies recovered their previous economic standing and productivity within one generation after both World War I and II. Yet, these uniform patterns of recovery seemingly do not apply to developing nations. Recent empirical assessments of postwar recovery that combine civil and international wars suggest that the Phoenix Factor pattern applies to developed societies and some developing societies, but does not hold in most developing societies. The open question is why?

Consistent with the Phoenix Factor, the Neoclassical Growth model anticipates fast recovery following wars but does not account for the possibility of protracted losses. Given the mixed empirical record we seek a possible explanation by modifying the Overlapping Generation (OLG) Model that allows multiple steady states during recovery. At one extreme OLG anticipate rapid recovery, and at the other extreme permit postwar collapse leading to a poverty trap. The intellectual objective is to identify and explain why some developing societies encounter great difficulties in their postwar recovery efforts, while others recover within a generation their previous productivity.

Suggested Citation

Kang, Kyungkook and Kugler, Jacek and Kugler, Tadeusz, Economic Consequences of Conflict (December 13, 2013). An earlier version of this paper was presented at the annual meeting of APSA 2011. A different version of this paper was published as Kugler, T., K. Kang, J. Kugler, M. Arbetman, and J. Thomas. (2013) “Demographic & Economic Consequences of Conflict.” International Studies Quarterly 57 (1) : 1-12, Available at SSRN: https://ssrn.com/abstract=1900761 or http://dx.doi.org/10.2139/ssrn.1900761

Kyungkook Kang (Contact Author)

University of Central Florida ( email )

4297 Andromeda Loop North
Howard Phillips Hall Rm 302
Orlando, FL 32816
United States

Jacek Kugler

Claremont Graduate University ( email )

Claremont, CA 91711
United States

Tadeusz Kugler

Roger Williams University ( email )

Bristol, RI 02809
United States
4012543447 (Phone)
4012543286 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
212
Abstract Views
1,264
rank
162,188
PlumX Metrics