Economic Shocks, Civil War and Ethnicity

44 Pages Posted: 4 Oct 2013 Last revised: 4 Mar 2015

Date Written: March 25, 2014

Abstract

Using a novel cross-country panel dataset, we show that commodity terms of trade declines cause civil war in countries with intermediate ethnic diversity. The civil war effects for highly diverse or homogenous societies are negative and insignificant. Since the size of the largest ethnic group explains 96% of the variation in the ethnic diversity measure, we conjecture that a key problem may be ethnic dominance: countries where the ethnic plurality is large, but not so large it cannot be challenged, may be most vulnerable to economic shocks. The findings may help to bridge the partly distinct literatures linking ethnicity and economic factors to conflict.

Keywords: Civil war, social conflict, ethnic diversity, economic growth

JEL Classification: D74, O11, O17

Suggested Citation

Janus, Thorsten and Riera-Crichton, Daniel, Economic Shocks, Civil War and Ethnicity (March 25, 2014). Journal of Development Economics, Vol. 115, Pages 32-44, 2015. Available at SSRN: https://ssrn.com/abstract=2335158 or http://dx.doi.org/10.2139/ssrn.2335158

Thorsten Janus

University of Wyoming ( email )

Box 3434 University Station
Laramie, WY 82070
United States

Daniel Riera-Crichton (Contact Author)

Bates College ( email )

Lewiston, ME 04240
United States

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