Economic Growth and Recovery after Civil Wars

43 Pages Posted: 30 Sep 2013

See all articles by Luis A. Gil-Alana

Luis A. Gil-Alana

University of Navarra - Department of Economics

Prakarsh Singh

Amherst College - Department of Economics

Date Written: August 1, 2013

Abstract

Using a fractional integration approach, we find that developing countries recover their economic growth faster than developed countries in response to a shock. The main finding is that longer civil conflicts are associated with a faster recovery process. To shed light on the channels, we explore correlations with components of GDP, military spending, institutions and aid and find heterogeneous effects of these channels by duration of conflict. Higher government spending is correlated with faster recoveries post longer conflicts and higher consumption spending is linked to faster recoveries following shorter conflicts. Military spending appears to be driving the government expenditure that makes countries recover from longer conflicts. More democratic institutions are associated with faster recoveries post short wars but slower recoveries following long wars. Finally, we can benchmark our recovery rates with respect to natural disasters, interstate wars and leadership change and we provide impulse response functions for a sample of countries in response to civil war.

Keywords: economic growth recovery, civil wars, time-series

JEL Classification: H56, F43, O40

Suggested Citation

Gil-Alana, Luis A. and Singh, Prakarsh, Economic Growth and Recovery after Civil Wars (August 1, 2013). Available at SSRN: https://ssrn.com/abstract=2332900 or http://dx.doi.org/10.2139/ssrn.2332900

Luis A. Gil-Alana (Contact Author)

University of Navarra - Department of Economics ( email )

Campus de Arrosadia
Pamplona, 31006
Spain

Prakarsh Singh

Amherst College - Department of Economics ( email )

P.O. Box 5000
Amherst, MA 01002-5000
United States
413-542-2271 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
137
Abstract Views
893
rank
210,668
PlumX Metrics