Culture, Economic Shocks and Conflict: Does Trust Moderate the Effect of Price Shocks on Conflict?

43 Pages Posted: 6 Apr 2021

See all articles by Gautam Bose

Gautam Bose

UNSW Australia Business School, School of Economics

Mitchell Choi

UNSW Australia Business School, School of Economics

Hasin Yousaf

UNSW Business School

Date Written: April 1, 2021

Abstract

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

Bose, Gautam and Choi, Mitchell and Yousaf, Hasin, Culture, Economic Shocks and Conflict: Does Trust Moderate the Effect of Price Shocks on Conflict? (April 1, 2021). UNSW Economics Working Paper. 2021-03, Available at SSRN: https://ssrn.com/abstract=3818198 or http://dx.doi.org/10.2139/ssrn.3818198

Gautam Bose

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Mitchell Choi

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Hasin Yousaf (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

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