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November 16, 2013 / compassioninpolitics

Economig Growth Good Evidence

I can’t take credit for this evidence, its from this thread.

Here are some I’ve cut. I think Royal is fairly good (but most versions of it aren’t cut to include the best warrants, and there are some possible complications, like “economic integration spreads economic crises”). Lieberthal and O’Hanlon are great i/ls to heg.

Recessions lock nations in a self-reinforcing death spiral to war.
Conceição and Kim 10 – Director of the Office of Development Studies at UNPD, assistant professor at the Technical University of Lisbon, degrees in Physics and Economics from the Technical University of Lisbon and PhD in Public Policy from the LBJ School of Public Affairs at the University of Texas at Austin / Office of Development Studies UNDP (Pedro and Namsuk, “The Economic Crisis, Violent Conflict, and Human Development”, International Journal of Peace Studies, V.15 No. 1, Spring/Summer 2010;
The unfolding global economic crisis is expected to bring the world economy into recession in 2009. Figure 1 shows the population weighted real GDP growth from 1991 to 2009 (estimates for 2008 and projection for 2009) for the world economy and for different groups of countries. The annual real GDP growth rate of the global economy was 5.1% in 2007 but the world economy is projected to shrink by -1.3% in 2009 (IMF, 2009). Emerging and developing economies are also projected to suffer a sharp slowdown as a result of the crisis, with a projected growth rate of 1.6% in 2009 compared to 8.3% in 2007. For many developing countries, the sharp economic slowdowns will translate into deep recessions. The UN projects that 15 developing countries will have ne gative per capita growth in 2009 1 , while projections from the World Bank adjusting for terms-of-tra de changes increase this to 50 2 . A recent strand of literature, reviewed in some detail in this paper, suggests that economic conditions are important determinants of the outbreak and recurrence of conflict. In particular, wars often start following growth collapses (Collier et al, 2009, p.15). Sharp economic slowdowns and low levels of income per capita appear to increase the likelihood of conflicts. In this context, it is opportune to explore insights fro m this literature, linking it also with the human development implications of both growth slow downs and conflict. In particular, the paper highlights the risks of the emergence of low-human-development/conflict traps. Given that the probability of conflict recurrence is high, as elaborated upon below, post-conflict countries – those that have experienced armed conflicts until recent years – may be particularly vulnerable. 3 As Figure 1 shows, post-conflict countrie s are projected to have a substantial decrease in the economic growth, from 7.4% in 2007 to 3.1% in 2009. Advanced economies may have a sharper slowdown (2.7% in 2007 and -3.8% in 2009), but they have well-developed social protection, and stable political systems that may facilitate the rec overy and absorb the pressures for social instability and conflict. In contrast, post-conflict countries, ma y be more vulnerable to a more protracted and slower recovery from the slowdown, given the hi gher risks of conflict recurrence. Drawing on a review of both theoretical and empirical literature, this paper frames the the connection between economic factors and conflict within a conceptual framework in which levels of human development and the risk of conflict are linked. Violent conflict is one of the most extreme forms of suppressing choices and advancing rights, and therefore a major threat to human development (UNDP, 2005, p.151). Since 1990, more than 3 million people have died in armed conflicts in developing countries (Marshall, 2005). The total war deaths are far more than the battle deaths. For example, the total war deaths are estimated as 1.2 million in Ethiopia during 1976-1991, but only 2% of them were directly engaged in the battles. (Bethany and Gleditsch, 2004) Conflict has also non-lethal consequences that may last across generations (UNDP, 2008a). As far as drivers of conflict are concerned, one of the most robust findings in the literature is that many economic conditions (low income, slow growth, and especially severe economic downturns) are correlated with the outbreak of conflict, with some evidence strongly suggesting that the causal direction runs from economic conditions to conflict (Col lier and Hoeffler, 2004). There is also a rich literature on the impact of horizontal inequality and dependence on natural resources as drivers of increases in the risk of conflict. This paper however focuses only on the economic factors, reviewing the fi ndings in light of the current economic crisis and the severe economic downturn that it now occurring. When it comes to the consequences of conflict, there is no doubt that it is harmful to human welfare, but it becomes even more hazardous if conflict results in a persistent low human development/conflict trap. A typical country reaching the end of a civil war faces a 44 percent risk of returning to conflict within five years (Collier et al, 2003, p. 83). Whether or not a country will experience a new civil war can be best predicted by whether the country experienced wars in the past (Collier, et al, 2004). The high rates of recurrence of conflict, along with the economic determinants of conflict, suggest the possibility of the existence of poverty-conflict traps (Collier et al, 2003; Bloomberg and others 2000). Given that pove rty and low per capita income ar e also correlated with worse health and education outcomes, and also that these outcomes suffer as a result of conflict, the conflict trap can be conceptualized in the framework of a low human development – conflict trap (Collier and Hoeffler, 2004; Justino and Verwimp, 2006; Alderman, Hoddinott and Kinsey, 2004). A self-reinforcing circle from conflict to low human development, and vice versa, is suggestively illustrated below (Chart 1). Conflict destroys accumulated physical and human capital, forces replacement of labor, deteriorates institutional capacity. A country experiencing conflict cannot secure long term returns for investments in both in physical and human capital, resulting in low investment in health and education. All of these factors lead to low levels of human development. A country with low levels of human development has more difficulty in improving institutions, and in increasing productivity and potential growth. In turn, lower growth rates heighten the risk of conflict, potentially trapping a country in the loop. The remainder of the paper discusses the empirical findings and theoretical background for linkage between the low-human development and conflict. Section 2 consid ers how low levels of human development can affect the risk of violent conflict. Section 3 shows how the conflict can result in low human development, completing the vicious circle. Section 4 concludes the paper with a brief discussion on the policy responses. 2. From Low Human Development to Conflict While there are number of factor s that could cause conflict, empirical studies find that poor economic performance is associated with higher incidence of conflict. Being a poor country is correlated with most forms of violence (UNDP, 2008a). Figure 2 shows that economic development and conflicts are observed to be clearly related. The level of GDP is negatively correlated with observing a new conflict. Collier et al (2009) fi nd that the predicted risk for a hypothetical country with characteristics set at the study’s sample mean was 4.6 per cent. If the level of per capita income were to be halved from this level, the risk woul d be increased to 5.3 per cent. Growth rates are also strongly associated with risks of conflict in deve loping countries. If the growth rate in developing countries is increase d by one percentage point from the mean, the risk of conflict decreases by 0.6 per centage points to 4.0 per cent (Collier et al, 2009). Kang and Meernik (2005) show that the grow th rate in conflict countries in the five years prior to conflict, including cases of conf lict recurrence, was on average 0.5 pe rcent compared to 2 percent in countries that remained peaceful. Empirical analysis of growth a nd conflict has inherent data limitations, but some recent studies using more careful methodology shows a st rong causal link running from poor economic performance to conflict. One probl em is that the direction of impact between the income per capita and conflict can run both wa ys. Assuming a priori one-way causality – that is, ignoring endogeneity – in regression analysis can result in biased estimates. Other information used in the empirical studies, such as income inequality, po pulation, ethnic distributi on, are also subject to difficulties of econometric identification and data quality (Hegre and Sambanis, 2006; Sambanis, 2004).To address the endogeneity problem, some studi es adopt instrumental variable analysis, using a strictly exogenous variable that moves with income per cap ita, but not with conflict. For instance, Miguel, Satyannath and Sergenti (2004) use annual changes in rainfall data as an instrument for income growth. The rainfall data predicts growth fluctuation in agricultural economies in Africa. They find that income shocks are drive conflict. Besley and Persson (2008) and Bazzi and Blattman (2008) use internationa l commodity price and trade shocks as the exogenous variables, but they find that the evidence on the relations hip between economic shocks as drivers of conflict is mixed.

Economic crisis triggers war.
ETH 2/4 – engineering, science, technology, and management university in Switzerland, part of the Swiss Federal Institutes of Technology Domain, subordinate to Switzerland’s Department of Home Affairs (Swiss Federal Institute of Technology Zurich, “Intrastate Conflict: Data, Trends and Drivers”, 2/4/13; )//Beddow
“The most robustly significant predictor of [armed] conflict risk and its duration is some indicator of economic prosperity. At a higher income people have more to lose from the destructiveness of conflict; and higher per-capita income implies a better functioning social contract, institutions and state capacity.”[3] This correlation between underdevelopment and armed conflict is confirmed in a 2008 paper by Thania Paffenholz[4] which notes that “since 1990, more than 50% of all conflict-prone countries have been low income states…. Two thirds of all armed conflicts take place in African countries with the highest poverty rates. Econometric research found a correlation between the poverty rate and likelihood of armed violence….[T]he lower the GDP per capita in a country, the higher the likelihood of armed conflict.” Of course, it is important to point out that this is not a claim that there is a direct causal connection between poverty and armed conflict. To repeat, the causes of conflict are complex and context specific, nevertheless, says Paffenholz, there is a clear correlation between a low and declining per capita income and a country’s vulnerability to conflict. It is also true, on the other hand, that there are low income countries that experience precipitous economic decline, like Zambia in the 1980s and 1990s, without suffering the kind of turmoil that has visited economically more successful countries like Kenya and Cote d’Ivoire. Referring to both Zambia and Nigeria, Pafenholz says these are cases in which “the social compact” has proven to be resilient. Both have formal and informal mechanisms that are able to address grievances in ways that allowed them to be aired and resolved or managed without recourse to violence. A brief review of literature on economics and armed conflict, published in the Journal of the Royal Society of Medicine, indicates the complexity and imprecision behind the question, “does poverty cause conflict?” While many of the “world’s poorest countries are riven by armed conflict,” and while poverty, conflict and under-development set up a cycle of dysfunction in which each element of the cycle is exacerbated by the other, it is also the case that “conflict obviously does not just afflict the poorest countries” – as Northern Ireland and the former Yugoslavia demonstrate. “Many poor countries are not at war; shared poverty may not be a destabilizing influence. Indeed, economic growth can destabilize, as the wars in countries afflicted by an abundance of particular natural resources appear to show.”[5] Another review of the literature makes the general point that “the escalation of conflict during economic downturns is more likely in countries recovering from conflict, or fragile states.” That makes Africa especially vulnerable on two counts: economic deprivation and recent armed conflict are present in a relatively high number of states, making the continent especially vulnerable to economic shocks. As a general rule, “weak economies often translate into weak and fragile states and the presence of violent conflict, which in turn prevents economic growth.” One study argues that “the risk of war in any given country is determined by the initial level of income, the rate of economic growth and the level of dependency on primary commodity exports.” Changes in rates of economic growth thus lead to changes in threats of conflict. As unemployment rises in fragile states this can “exacerbate conflict due to comparatively better income opportunities for young men in rebel groups as opposed to labour markets.”[6] The concentration of armed conflict in lower income countries is also reflected in the conflict tabulation by Project Ploughshares over the past quarter century. The 2009 Human Development Index ranks 182 countries in four categories of Human Development – Very High, High, Medium, Low. Of the 98 countries in the Medium and Low categories of human development in 2009, 55 per cent experienced war on their territories in the previous 24 years. In the same period, only 24 per cent of countries in the High human development category saw war within their borders, while just two (5 per cent) countries in the Very High human development ranking had war on their territory (the UK re Northern Ireland and Israel). The wars of the recent past were overwhelmingly fought on the territories of states at the low end of the human development scale. A country’s income level is thus a strong indicator of its risk of being involved in sustained armed conflict. Low income countries lack the capacity to create conditions conducive to serving the social, political, and economic welfare of their people. And when economic inequality is linked to differences between identity groups, the correlation to armed conflict is even stronger. In other words, group based inequalities are especially destabilizing.[7] These failures in human security are of course heavily shaped by external factors, notably international economic and security conditions and the interests of the major powers (in short, globalization),[8] and these factors frequently combine with internal political/religious/ethnic circumstances that create conditions especially conducive to conflict and armed conflict.

Economic decline causes war and kills heg.
JOE 08 ­– United States Joint Forces Command Center for Joint Futures, informational arm of Department of Defense (Joint Operating Environment, “The JOE 2008: Challenges and Implications for the Future Joint Forces”, 11/25/08;
In contrast, real catastrophes may occur if economic growth slows or reverses either on a global scale or within an emerging power. Growing economies and economic hopes disguise a number of social ills and fractures. The results of a dramatic slowdown in China’s growth, for example, are unpredictable and could easily lead to internal difficulties or aggressive behavior externally. That is precisely what happened in Japan in the early 1930s with the onset of the Great Depression. Even within the most optimistic economic scenarios, there will be major areas of the world left behind – the bottom billion. Between now and the 2030s, many of these areas will likely lie in sub-Saharan Africa and the Middle East (excluding the oil boom countries). Although both regions have maintained impressive growth rates over the past several years, those rates have not been sufficient to decrease unemployment. If economic stability and growth continue unabated up to the 2030s, there would be sufficient global resources to provide support for failing and failed states — that is, providing the political will is there. A broken economy is usually a harbinger of social collapse and anarchy, or ruthless despotism. Neither is attractive, but if the United States chooses to intervene in such situations, political and military leaders should keep in mind that they should only insert professional military forces if they are willing to sustain and inflict casualties which could result on both sides, as the experiences of the intervention in Somalia in 1993 underline. A central component of America’s global military posture is its massive economic power. This power is predicated on a financially-viable, globally connected domestic economy. Should this central feature of American power be weakened, it is highly likely that military capabilities will be diminished or otherwise degraded as a result.

Economic growth solves war – increased state capacity.
HSRP 10 – Human Security Report Project, Simon Fraser University, Canada (“Human Security Report 2009/2010”, 12/2/10; )//Beddow
But despite the widespread lack of consensus over the causes of civil war, very few quantitative researchers would disagree that there is a robust association between high levels of national income and a lower risk of war. Other things being equal, high national incomes translate into greater state capacity and more resources for governments to buy off grievances and defeat insurgents in those wars that cannot be prevented. The conflict trends in East Asia over the past 30 years, which are the focus of Chapter 3, provide an instructive example of the association between rising levels of economic development and the incidence of armed conflict. As national incomes in the region have steadily risen since the late 1970s, state capacity and performance legitimacy have also increased—and conflict numbers have declined by some 60 percent. Indeed, insurgents—who have been largely excluded from the benefits of economic growth in the region—have not achieved a single military victory since the 1970s.


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