Culture, Economic Shocks and Conﬂict: Does Trust Moderate the Eﬀect of Price Shocks on Conﬂict?
43 Pages Posted: 6 Apr 2021
Date Written: April 1, 2021
This paper documents an important channel through which culture may aﬀect conﬂict. We examine a panel of developing countries over ﬁfty years and use price shocks to extractive commodities as an exogenous variation in the country’s economic outlook. We ﬁnd that these price shocks are less likely to result in the onset of civil war and conﬂict in countries that have higher levels of trust. However, we also ﬁnd that trust does not moderate price shocks’ eﬀect on the cessation of conﬂict. Our study provides new empirical evidence on the interdependence of economic shocks and culture on conﬂict.
Keywords: Trust; Economic shocks; Civil war; Conﬂict
JEL Classification: D74, E02, P16, Z10
Suggested Citation: Suggested Citation