Report

Teaser, summary, work performed and final results

Periodic Reporting for period 2 - POLICIES_FOR_PEACE (The economics of lasting peace: The role of policies and institutions)

Teaser

Worldwide armed conflict is a very serious problem leading to a large-scale death toll and to a whole series of detrimental effects on the lives of the people affected. A growing academic literature aims at explaining the root causes and consequences of fighting. While much of...

Summary

Worldwide armed conflict is a very serious problem leading to a large-scale death toll and to a whole series of detrimental effects on the lives of the people affected. A growing academic literature aims at explaining the root causes and consequences of fighting. While much of the existing academic work on the topic tends to focus on factors that are hard to modify, only limited attention has been directed so far to study what actual policies can best curb fighting. To address this, the current ERC project POLICIES_FOR_PEACE studies what key institutions and policies are best suited to reduce incentives for engaging in appropriation and armed conflict. For achieving and sustaining peace it is crucial to get the incentives right of all main actors in society.

In particular, this project studies systematically a series of key policies and particular political institutions that have the potential to achieve and sustain peace in both the short and long run. This focus on lasting, sustainable peace makes it already clear that short-run military repression ignoring the sources of discontent can typically not be a sustainable solution for lasting peace.

Work performed

The project is structured into six subprojects, and much work has been performed and progress has been made for all of these subprojects. In particular, the first subproject studies the question of how the funding for armed rebels can be dried out. A novel regression analysis has been carried out both at the geographic and ethnic group level. The findings have been published in the article “This mine is mine: How minerals fuel conflicts in Africa” in the American Economic Review in 2017 (joint with N. Berman, M. Couttenier and M. Thoenig). It shows, among others, that more funding due to natural resource rents makes armed fighting more feasible and that the transparency / traceability of minerals and corporate social responsibility can foster peace.

The second subproject focuses on pacification in the context of Northern Ireland. Together with H. Müller we have built a novel dataset on power-sharing at the local level in Northern Ireland, analyzed it econometrically, and published the article “Can Power-sharing foster peace? Evidence from Northern Ireland” in Economic Policy in 2018, detecting a pacifying impact of power-sharing.

While the third subproject is devoted to an analysis of conflict-reducing policies in contexts of complex warfare where networks of armed groups are crucial (we are in the process of performing structural estimations on this), in subproject four we focus on the impact of institutions on the risk of war. Institutions are typically endogenous, making it very hard to detect any causal and reliable estimates of their impact. The various settings that we study in this subproject address these pitfalls by building theoretical models and exploiting natural experiments.

Subproject five is devoted to an investigation of the impact of education on peace. Our new working paper “Education and Conflict: Evidence from a Policy Experiment in Indonesia” (joint with A. Saia) studies the impact of a large-scale educational reform on the likelihood of political violence exploiting arguably exogenous variation. The causal identification strategy of our paper allows to avoid the usual pitfalls of confounding factors yielding endogeneity bias (e.g. if countries with more education spending also have a better governance in general, then any correlations between education and peace could be purely spurious – a methodological issue we address with the help of the policy experiment we study). We find a strong peace-promoting effect of school construction in Indonesia.

Finally, subproject 6 focuses on the scope for health policies to curb the incentives for conflict. We have put together a novel dataset and perform currently an econometric investigation.

Overall, the current results of the ERC project POLICIES_FOR_PEACE suggest that wars are far from being an unpreventable fatality, but that indeed clever design of institutions and policies can have a strong pacifying effect.

Final results

All the research questions studied above and results found are novel, while of course, as always, building on the past great work of other scholars around the world. While new results have already been found for various subprojects (as detailed above), we expect further new findings for several of the subprojects, covering among others the importance of networks for policy, the impact of institutions as well as the effects of health policies.

Website & more info

More info: https://sites.google.com/site/dprohner/.