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Licensed Unlicensed Requires Authentication Published by De Gruyter October 7, 2014

Conflict Spillovers and Growth in Africa

J. Paul Dunne and Nan Tian

Abstract

A number of studies have attempted to evaluate the costs of conflict, but few have evaluated the impact of conflict on country growth. An even more limited number of studies have attempted to evaluate the spillover effects of conflict, with those that have finding clear negative effects on primary neighbors and then positive secondary neighbor effects. There are, however, a number of issues with these studies and this paper updates and develops their analysis using a dynamic panel approach. It confirms the negative sign and magnitude of the previous findings for the host country and primary neighbors, but finds no evidence of any positive or negative effects of conflict on secondary neighbors.

JEL codes: C21; F51; H56; O11

Corresponding author: Nan Tian, School of Economics, University of Cape Town, Cape Town, Western Cape 7701, South Africa, E-mail:

Appendix

Table A1

Variable description and summary statistics.

VariableVariable descriptionMeanStd. dev
gdp(1)Real GDP per capita18212142
invest(1)Investment as a share of GDP20.5613.51
school(2)(3)Percentage of secondary education attained in the population older than 2511.9012.62
pop(1)Population in 000’s11,66317,810
conflict(4)Conflict indicator (1=Conflict, 0=No conflict)0.190.39
intense(4)Intense Conflict indicator (1=Conflict, 0=No conflict)0.060.24
civil(4)Civil war indicator (1=Civil war, 0=No civil war)0.130.34
ΔgdpGrowth rate of real per capital GDP (log)0.0090.108
ΔinvestGrowth rate of investment as share of GDP (log)0.0120.249
ΔschoolGrowth rate of education attainment (log)0.0100.007
n+g+δPopulation growth rate (clpop)+0.05 (assumed value for g+d) used in Solow-style regressions0.0750.065

Note: (1) Penn World Table 7.1 Center for International Comparisons of Production, Income and Prices (CIC), University of Pennsylvania.

(2) Penn World Table 8.0 Feenstra, Robert C., Robert Inklaar and Marcel P. Timmer (2013), “The Next Generation of the Penn World Table.” Available for download at www.ggdc.net/pwt.

(3) Barro, Robert and Jong-Wha Lee, “A New Data Set of Educational Attainmentin the World, 1950–2010,” forthcoming, Journal of Development Economics.

(4) UCDP/PRIO Armed Conflict Version 4-2009 and Themner, Lotta and Wallensteen, Peter, “Armed Conflict, 1946–2010.” Journal of Peace Research.

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Published Online: 2014-10-7
Published in Print: 2014-12-1

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