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Unformatted text preview: Journal of Economic Literature 2010, 48:1, 3–57 http:www.aeaweb.org/articles.php?doi=10.1257/jel.48.1.3 Civil War Christopher Blattman and Edward Miguel* Most nations have experienced an internal armed conflict since 1960. Yet while civil war is central to many nations’ development, it has stood at the periphery of economics research and teaching. The past decade has witnessed a long overdue explosion of research into war’s causes and consequences. We summarize progress, identify weaknesses, and chart a path forward. Why war? Existing theory is provocative but incomplete, omitting advances in behavioral economics and making little progress in key areas, like why armed groups form and cohere, or how more than two armed sides compete. Empirical work finds that low per capita incomes and slow economic growth are both robustly linked to civil war. Yet there is little consensus on the most effective policies to avert conflicts or promote postwar recovery. Cross-country analysis of war will benefit from more attention to causal identification and stronger links to theory. We argue that micro-level analysis and case studies are also crucial to decipher war’s causes, conduct, and consequences. We bring a growth theoretic approach to the study of conflict consequences to highlight areas for research, most of all the study of war’s impact on institutions. We conclude with a plea for new and better data. (  JEL D72, D74, O17) 1.  Civil War and the Study of Economics I nternal civil conflict has been commonplace  during  the  past  half-century,  a  fact that, until recently, escaped the notice  of  most  economists.  Civil  wars,  or  those  i   nternal  conflicts  that  count  more  than  1,000  battle  deaths  in  a  single  year,  have  afflicted  a  third  of  all  nations.  Counting  civil  conflicts, or those that count at least  t   wenty-five  battle  deaths  per  annum,  increases  the  incidence  to  more  than  *  Blattman:  Yale  University.  Miguel:  University  of  California,  Berkeley  and  NBER.  We  thank  Ana  Arjona,  Karen  Ballentine,  Bob  Bates,  Tim  Besley,  David  Card,  Ernesto Dal Bó, Jesse Driscoll, Bill Easterly, Jim Fearon,  Karen  Ferree,  Mary  Kay  Gugerty,  Anke  Hoeffler,  Patricia Justino, Stathis Kalyvas, David Leonard, Jason Lyall,  Andrew Mack, Daniel Maliniak, Gerard Padro-i-Miquel,  Torsten Persson, Dan Posner, Robert Powell, Vijaya Ramachandran,  Debraj  Ray,  Marta  Reynal-Querol,  Gérard  Roland, Shanker Satyanath, Jacob Shapiro, Ryan Sheely, Stergios Skaperdas, Abbey Steele, Julia Strauss, Dennis de  Tray, Philip Verwimp, Barbara Walter, Jeremy Weinstein,  our anonymous referees and the editor, Roger Gordon, for  comments and discussion. We are deeply grateful to our  coauthors  on  related  research:  Jeannie  Annan,  Samuel  Bazzi, Bernd Beber, John Bellows, Khristopher Carlson,  John  Dykema,  Rachel  Glennerster,  Dyan  Mazurana,  Gerard Roland, Sebastian Saiegh, Shanker Satyanath, and  Ernest Sergenti. Camille Pannu, Abbey Steele, and Melanie Wasserman provided superb research assistance. 3 4 Journal of Economic Literature, Vol. XLVIII (March 2010) half.1 This internal warfare is not just extremely  common, it is also persistent. Figure 1 displays  the cumulative proportion of all nations experiencing wars and conflicts since 1960. Twenty  percent  of  nations  have  experienced  at  least  ten years of civil war during the period. The  proportion  of  countries  embroiled  in  civil  conflict  at  a  single  point in  time  increased steadily through the last half of the  twentieth  century,  peaking  in  the  1990s  at  over 20 percent (see figure 2). In sub-Saharan Africa, the world’s poorest region, nearly  a  third  of  countries  had  active  civil  wars  or  conflicts  during  the  mid-1990s.2  The  prevalence of war prompted scholars to ask a simple question: why there is so much civil war  in the world? A decade later, observers began  to ask where some of the civil wars had gone;  there  were  “just”  thirty-two  active  conflicts  in 2006, the result of a steady decline in conflict from a peak of fifty-one in 1992. The outbreak of internal wars is commonly  attributed to poverty. Indeed, the correlation  between  low  per  capita  incomes  and  higher  propensities  for  internal  war  is  one  of  the  most robust empirical relationships in the literature.  Figure  3  illustrates  the  relationship  between per capita income (percentiles) and  civil  war  using  a  nonparametric  Fan  regression;  countries  towards  the  bottom  of  the  world income distribution—many in Africa— have  several  times  more  wars  than  those  in  1   These definitions come from the well-known UCDP/ PRIO  dataset  developed  by  Nils  Petter  Gleditsch  et  al.  (2002)  and  extended  in  Lotta  Harbom  and  Peter  Wallensteen  (2007).  UCDP/PRIO  defines  conflict  as  “a  contested incompatibility that concerns government and/ or  territory  where  the  use  of  armed  force  between  two  parties, of which at least one is the government of a state,  results  in  at  least  25  battle-related  deaths.”  As  noted  below, the definition and coding of civil war is contested,  but our main points are robust to alternative approaches. 2    The  proportion  of  individuals  directly  affected  by  war  violence  is  lower  than  suggested  by  this  figure,  as  many  armed  conflicts  are  confined  to  subregions.  Yet  even individuals living in largely peaceful regions can be  adversely affected by insecurity, the public policy changes,  and economic consequences of a civil war. the top quartile, while middle income countries still face considerable conflict risk.  Yet claims of a direct causal line from poverty to conflict should be greeted with caution.  One reason is that this line can be drawn in  reverse.  Conflicts  devastate  life,  health,  and  living  standards.  A  chilling  example  is  the  Democratic Republic of Congo, where surveys  suggest millions may have died as a result of  the  recent  civil  war,  primarily  due  to  hunger  and  disease  (Benjamin  Coghlan  et  al.  2007).  Although the accuracy of mortality figures in  such war zones is open to question, estimated  mortality  figures  for  Rwanda,  Angola,  and  Sudan are likewise shocking. Massive loss of life  inevitably  affects  the  economy.  Warfare  also  destroys  physical  infrastructure  and  human  capital, as well as possibly altering some social  and  political  institutions.  Moreover,  internal  wars  are  contagious;  refugee  flows,  disease,  lawlessness,  and  the  illicit  trades  in  drugs,  arms, and minerals have generated “spillover”  effects into the countries neighboring conflict  zones. Some have argued that the destructive  consequences  of  internal  warfare  may  be  so  great as to be a factor in the growing income  gap  between  the  world’s  richest  and  poorest  nations (Paul Collier et al. 2003). A  seeming  paradox,  however,  is  that  warfare  is  also  sometimes  credited  for  the  t   echnological  and  institutional    evelopment  d that underpins Western economic   rosperity.  p Both  internal  and  external  wars  are  commonplace  in  European    istory.  Several  h scholars  have  claimed  that  inter-state  wars  and  wars  of  territorial  conquest  served  a  critical  role  in  enabling  the  development  of  strong  and  capable  government  institutions  in Europe (e.g., Daron Acemoglu and James  A.  Robinson  2006;  Niall  Ferguson  2002;  Charles Tilly 1975; Tilly 1992). The evidence  on  institution-building  and  internal  warfare  is limited, but cases of stronger states emerging out of contemporary civil wars also exist  in East Africa and Southeast Asia (Dan Slater  2005; Jeremy M. Weinstein 2005a). Blattman and Miguel: Civil War 5 0.6 – Proportion of countries Proportion of countries with civil war Proportion of countries with civil war or con ict 0.4 – 0.2 – – – – – – 0– 0 10 20 30 40 Number of years war and war or con ict Figure 1: The Distribution of Civil War or Conflict Years across Countries, 1960–2006 Sources: Data based on UCDP/PRIO armed conflict database. Civil wars are those internal conflicts that count  more than 1,000 battle deaths in a single year. Civil war or conflict includes cases with at least twenty-five battle  deaths in a single year. It seems clear to us that civil war ought to be  central in the study of international   conomic  e development. Yet leading   evelopment econod mists have too often overlooked it; for instance,  two respected and widely taught undergraduate   evelopment economics   extbooks (Debraj  d t Ray 1998; Michael Todaro 1999) do not contain the words “war,” “conflict,” or “violence”  in  their  subject  index.  Moreover,  a  2007  survey  (by  the  authors)  of  sixty-three  development  economics  course  syllabi  in  leading  U.S. universities reveals that only 13 percent  of  undergraduate  courses  and  24  percent  of  graduate courses mention any of these topics  at all.3 Over the past decade, however, many  economists  and  other  social  scientists  have  worked  to  better  understand  the  causes  and  the  economic  legacies  of  internal  warfare,  often in collaboration with political   cientists  s and other scholars. This article’s main goal is to  summarize this progress and help chart a productive  path  forward.  As  befits  an    merging  e field, this article focuses as much on what we  cannot say today as what we know. Unfortunately, our survey deals too briefly  with important topics such as civil war endings    3    The  survey  included  thirty-eight  undergraduate  and  twenty-five graduate syllabi. We searched for online syllabi  for undergraduate institutions ranked in the top fifty of the  U.S. News and World Report college rankings (2007a), and  for  Ph.D.  economics  programs  ranked  in  the  top  twentyfive of either the National Research Council (1995), Piper  Fogg  (2007),  or  U.S. News and World Report  economics  PhD (2007b) ranking. Details are available upon request. Journal of Economic Literature, Vol. XLVIII (March 2010) 6 0.25 – Proportion of countries 0.2 – 0.15 – 0.1 – Proportion of countries with civil war Proportion of countries with civil war or con ict – – – – – 0.05 – 1960 1970 1980 1990 2000 Year Figure 2: Proportion of Countries with an Active Civil War or Civil Conflict, 1960–2006 Sources: Data based on UCDP/PRIO armed conflict database (Gleditsch et al. 2002). Civil wars are those  internal conflicts that count more than 1,000 battle deaths in a single year. Civil war or conflict includes cases  with at least twenty-five battle deaths in a single year. and  duration,  postwar  reconstruction,  and  the  emergence  of  peaceable  institutions,  in  part  because  these  subliteratures  are  still  largely in flux. We must also neglect related  forms  of  violence—interstate  war,  terrorism,  coups,  communal  violence,  political  repression,  and  crime—to  keep  this  article  a  reasonable  length.  This  is  a  pity  because  the distinction between civil wars and other  forms  of  political  instability  has  largely  been  assumed  rather  than  demonstrated.4 Our  principal  conclusions  challenge  researchers  to  focus  on  new  questions,  econometric  methods,  and  data.  First,  beginning  with  the  origins  of  conflict,  we  argue  that  existing  theory  is  incomplete. 4    Related  literatures  investigate  the  logic  and  organization  of  terrorism,  including:  self-selection  and  screening  of  terrorist  recruits  (Ethan  Bueno  de  Mesquita  2005);  why  radical  religious  clubs  specialize in suicide attacks (Eli Berman and David D. Laitin  2008);  how  terrorist  organizations  use  bureaucracy  to  align  the  asymmetric  preferences  for  violence  among  leaders  and  operatives  (Jacob  N.  Shapiro  2008);  the  economic  logic  of    ostage-taking  and  government  h response  (Todd  Sandler  and  Walter  Enders  2004);  the  splintering  and  ideology  of  terrorist  groups  (Bueno  de  Mesquita  2008);  the  logic  of  suicide  missions  (Diego  Gambetta  2005);  and  why  terrorists  employ  roadside  bombs  (Matthew  A.  Hanson  2007).  The  line  between  rebel  and  terrorist  groups  is  blurry,  and  many  of  the  lessons  we  draw  may  apply  to  terrorism.  Further  theoretical  work  laying  out  the  analytical  distinctiveness  of  civil  wars  versus  terrorism  and  other  forms  of  political  violence  would  be  useful.  Anjali  Thomas  Bohlken  and  Ernest  Sergenti  (2008)  document  the  close  link  between  local  economic  conditions  and  the  outbreak  of communal (inter-religious) riots across Indian states. Blattman and Miguel: Civil War 7 0.4 – 95% upper band Fan regression 95% lower band Incidence of civil war 0.3 – 0.2 – 0.1 – – – – – – – 0– 0 0.2 0.4 0.6 0.8 1 GDP per capita Figure 3: Incidence of Civil War by Country Income per Capita, 1960–2006 Sources: Figure  displays  the  results  of  a  Fan  regression  of  the  incidence  of  civil  war  on  GDP  per  capita  percentiles  (bandwidth  = 0.3,  bootstrapped  standard  errors).  Population  and  GDP  data  are  drawn  from  the World Development Indicators (World Bank 2008). Civil war incidence is drawn from the UCDP/PRIO  armed conflict database (Gleditsch et al. 2002; Harbom and Wallensteen 2007). Central  theoretical  problems  remain  u   nresolved,  including  the  sources  of  armed  group  cohesion  amid  pervasive  collective  action  problems.  Moreover,  we  have  yet  to  develop  persuasive  arguments  for  nontraditional  mechanisms—myopic  or  selfish  leaders, for example, or the role of ideology  and  identity  in  reducing  free-riding  within  armed  groups.  As  a  consequence,  too  little  empirical work is motivated by (and explicitly  derived from) formal models. Second,  the  leading  existing  theories  remain  untested.  Simple  contest  models—ones  that  link  conflict  to  geographic  c   onditions  that  favor  insurgency,  or  ones  where  poverty  triggers  political  violence— have been tested often. Yet one of the most  dominant rational explanations for civil war,  conflict  as  the  result  of  commitment  problems  that  prevent  socially  desirable  agreements  between  fighting  sides,  has  barely  been examined. Third, theories seldom specify the empirical  predictions  that  can  test  between  competing  accounts.  What,  for  instance,  is  the  alternative to purely rational theories of warfare? “Irrational” warfare? In fact, there are  several plausible alternatives: rational actors  who do not internalize the social costs of war;  maximizing  actors  with  systematic  defects  in  decision  making  or  expectations  formation; strategic interactions between multiple  actors  within  coalitions;  idiosyncratic  war  (described below); and so forth. Theory will  8 Journal of Economic Literature, Vol. XLVIII (March 2010) lead to better empirical testing if and when  it  better  specifies  the  empirical  predictions  that distinguish between models. Fourth,  further  cross-country  regressions  will  only  be  useful  if  they  distinguish  between competing explanations using more  credible  econometric  methods  for  establishing  causality.  Up  to  now  this  literature  has  been  enormously  provocative  but  has  faced  equally  important  limitations:  convincing  causal  identification  of  key  relationships  is  rare;  robustness  to  alternative  specifications  or  assumptions  is  seldom  explored;  countryyears  are  often  assumed  to  be  independent  units in time and space; measurement error  is  rarely  addressed;  an  absence  of  evidence  about particular effects has often been interpreted  as  evidence  of  absence;  and  theories  of  individual  or  armed  group  behavior  are  tested  at  the  country  level  despite  obvious  aggregation  difficulties.  It  would  be  easy  to  conclude that the cross-country literature has  been  exhausted,  but  that  would  go  too  far.  We  highlight  new  macro-level  research  that  addresses some of these challenges head on. Fifth,  we  believe  the  most  promising  avenue for new empirical research is on the  subnational  scale,  analyzing  conflict  causes,  conduct, and  consequences  at  the  level  of  armed  groups,  communities,  and  individuals. We refer mainly to the blossoming number  of  microeconomic  statistical  studies  of  armed  conflict  and  combatants,  as  well  as  to  the  integration  of  quantitative  evidence  with case and historical analysis. The empirical microeconomic work sometimes employs  more  credible  research  designs,  yet  so  far  the  results  are  scattered  and  many  findings  may be context-dependent. More studies are  exactly what is needed. In our view, the most  interesting  directions  for  research  include  the  internal  organization  of  armed  groups,  rebel  governance  of  civilians,  the  strategic  use  of  violence,  counterinsurgency  strategy,  and  the  roots  of  individual  participation  in  violent collective action. Each is ripe for the  concerted application of contract theory and  mechanism design and insights from behavioral economics and industrial organization. Sixth, we argue that researchers ought to  take  a  more  systematic  approach  to  understanding  war’s  economic  consequences.  An  episode  of  civil  conflict,  not  its  absence,  is  the  norm  in  most  countries,  and  that  war  may  be  a  nation’s  most  important  historical  event.  Yet  what  those  effects  imply  for  long-run  economic  development  is  unclear.  This  article  also  attempts  to  bring  a  unifying growth theory framework to the study of  war’s economic legacies. The bulk of existing  evidence focuses on war’s impacts on factors  of   roduction—population and capital—and  p finds that rapid recovery along these dimensions  is  possible.  War’s  impacts  on  human  capital  (including  education,  nutrition,  and  health),  however,  are  often  more  persistent.  Like  the  “causes”  literature,  research  into  “consequences” is beginning to benefit from  better  micro-level  data  and  greater  use  of  experimental  or  quasi-experimental  variation.  Viewed  through  the  lens  of  economic  growth theory, however, there remain more  gaps  than  solid  conclusions  in  our  understanding  of  postwar  recovery.  Both  theory  and  evidence  are  weakest  in  assessing  the  impact of civil war on the fundamental drivers  of  long-run  economic  performance— institutions,  technology,  and  culture—even  though  these  may  govern  whether  a  society  recovers, stagnates, or plunges back into war.  Finally,  in  pursuit  of  all  these  objectives,  much  is  to  be  gained  from  collecting  new  data.  We  conclude  our  review  with  recent  examples and priorities for data development. We share a title with a useful recent survey  by Collier and Anke Hoeffler (2007) but have  different  goals.  Collier  and  Hoeffler  focus  i  n-depth  on  a  set  of  core  macroeconomic  questions.  Our  piece  brings  in  a  broader  range of research questions and approaches,  including  an  overview  of  the  large  conflict  literature  in  political  science,  and  a  critical  Blattman and Miguel: Civil War but hopeful view of the new applied microeconomic work in conflict, probably the single  most  promising  research  frontier  in  our  view.  We  also  focus  on  the  theoretical  and  econometric limitations of existing work. We  believe  a  number  of  the  arguments  in  this  article  are  novel  or  have  never  before  been  assembled  in  a  single  place,  including  the  discussion  of  specific  directions  for  future  research. The  rest  of  the  paper  is  organized  as  follows. On civil war causes, section 2 surveys  theoretical advances and section 3 covers the  large  empirical  literature.  Section  4  tackles  the growing literature on civil war’s economic  consequences. The final section   ummarizes  s key lessons and policy implications, and suggests  strategies  to  sustain  intellectual  progress in this emerging field. 2.  Theories of Armed Conflict Newspaper  reports,  historical  accounts,  and  econometric  work  overflow  with  e   xplanations  for  conflict:  ancient  hatreds  incite  violence;  oil  wealth  breeds  separatism;  trade  shocks  trigger  insurrections;  income  inequality  leads  to  class  warfare.  Surveying  the  vast  literature  on  civil  war,  one  feels  caught  in  a  complex  web  of  root  and proximate causes (not to mention endogeneity). In this context, the principal contribution  of  formal  economic  theory  has  been  to  clarify  and  systematize  this  tangle  of  material  explanations.  Models  from  both  economics  and  political  science  have  reduced  varied  accounts  of  civil  war  onset  to a few common logics, each of which can  be  approximated  in  a  parsimonious  framework  of  self-interested,  wealth-maximizing  groups  or  individuals.  We  first  review  the  seminal  theories  of  civil  war,  then  other  influential  branches  of  the  theoretical  literature, and wrap up this section with our  views on promising directions. 9 2.1  Insurrection as Competition for Resources Models of armed conflict depart from the  assumptions  of  standard  economic  theory  in  at  least  three  ways:  property  rights  are  neither  well-defined  nor  automatically  protected,  contracts  between  parties  cannot  be  enforced,  and  rulers  can  be  replaced  by  means other than the ballot box. In this lawless setting, predation and defense are alternatives to directly productive activities. The  contest  model,  the  workhorse  of  the  formal  conflict  literature,  originated  with  Trygve  Haavelmo  (1954),  and  was  popularized  by  Jack  Hirshleifer  (1988;  1989),  Michelle  R.  Garfinkel  (1990),  and  Stergios  Skaperdas (1992). It considers two   ompeting  c parties, a rebel group and a government, and  analyzes each side’s allocation of resources to  production  versus  appropriation;  Garfinkel  and Skaperdas (2007) summarize the permutations  and  mechanics  of  two-party  contest  models  embedded  in  a  general  equilibrium  framework.  While  production  is  modeled  in  the  standard  manner,  appropriation  is  modeled  using  a  “contest  success  function”  where  inputs  (e.g.,  guns,  G)  translate  into  a  probability  of  fighting  side  1  winning,  p1,  and  consuming  the  opponent  (side  2’s)  economic  production  in  addition  to  their  own.  Following Hirshleifer (1989), the most commonly used formulation in theoreticalapplications is presented in equation 1, where  G1  refers  to  side  1’s  weapons,  G2  refers  to  2’s  weapons, and m captures the effectiveness of  weaponry in determining the victor: (1)    m G1 p1 (G1, G2) = ________ . m m G1 + G2 Contest models boast at least one robust  prediction:  the  odds  of  winning  increase  with the relative effectiveness of that side’s  10 Journal of Economic Literature, Vol. XLVIII (March 2010) fighting  technology.  Technology  is  defined  broadly in this literature, including any factor that influences effectiveness, from skillful  revolutionary  leaders,  to  access  to  firearms  and training, rugged terrain, or bases on foreign soil. As we will see below, this prediction receives broad empirical support in the  success of rebel movements, contributing to  the popularity of the contest approach.  Contest models often treat rebels and rulers  as  unitary  actors.  Hershel  I.  Grossman  (1991)  departs  slightly,  considering  the  case  of  a  single  ruler  and  many  citizens,  each  of  whom  can  either  produce  or  predate.5  Grossman’s  move  from  unitary  actors  to  r   epresentative  households  (assumed  unable  to coordinate their activities) does not greatly  change the conclusions of the contest model,  but  it  does  highlight  the  importance  of  the  individual  participation  problem:  armed  group leaders must motivate citizens to soldier for their side. One immediate insight is  that  participation  in  soldiering  rises  as  the  opportunity cost of fighting falls.  These  models  thus  predict  that  poverty  lowers individual incentives for maintaining  order,  as  soldiering  increases  with  the  relative  returns  to  fighting  versus  production.  Can  this  prediction  account  for  the  crosscountry  correlation  between  poverty  and  civil war? In fact, the theoretical connection  between  income  and  armed  civil  conflict  is  not so clear cut. In contest models the winning  party  consumes  the  resources  of  both  the  state  and  the  losers.  On  the  one  hand,  the  greater  the  national  wealth  (whether  from  taxes,  assets  like  natural  resources,  or  external transfers), the more there is to fight  over and thus, in standard formulations, the  greater  the    quilibrium  effort  devoted  to  e fighting rather than producing (e.g., Garfinkel  and  Skaperdas  2007;  Grossman  1999).  Yet  the  absence  of  resources—natural  or  otherwise—makes  production  less  individually  attractive than fighting, but also means there  is a smaller pie to fight over. James D. Fearon  (2007)  notes  that  these  opposing  wealth  effects cancel out in some cases: if state revenues are drawn entirely from taxes on citizen  incomes,  then  income  could  have  no  effect  on equilibrium levels of conflict. Positive or  negative income effects could result, though,  if utility or revenue collection has a nonlinear  functional form. Ernesto Dal Bó and Pedro Dal Bó (2004)  model  these  potentially  opposing  effects  in  a  two-sector  model  of  the  economy.  In  the  capital-intensive  sector,  an  income  shock  increases  the  value  of  controlling  the  state  without  increasing  wages  and  the  opportunity  cost  of  fighting;  the  opposite  is  true  of  a  shock  to  the  labor-intensive  sector.  Thus  in the first case conflict risk increases, while  in the second it falls. Timothy J. Besley and  Torsten  Persson  (2008a;  forthcoming)  use  a  related  framework  to  model  the  impact  of  import  and  export  commodity  prices  on  government  revenues  and  rents,  as  well  as  on  labor  incomes.  They  conclude  that  terms  of  trade  volatility  in  either  direction  may    timulate  repression  and  armed  cons flict:  increasing  import  prices  increase  conflict risk by suppressing the real wage while  higher export prices  lead to greater conflict  risk by boosting the size of the government  revenue pie tempting armed groups. A notable  aspect  is  the  authors’  attempt  to  link  these sharp theoretical predictions to crosscountry  evidence,  and  we  return  to  their  empirical  findings  below.  Both  papers  also  suggest  that  the  distribution  of  income  and  wealth—whether  across  individuals  or  sectors—is  central  in  explaining  the  economic    i  ncentives  for    ebellion.6  Civil  war  seems  r 5 Another approach considers a rebel leader who competes with the incumbent for citizen support (Grossman  1999). 6  See Roland Benabou (2000) and Abhijit V. Banerjee  and Esther Duflo (2003) on inequality and economic performance across countries. Blattman and Miguel: Civil War more likely when state wealth is easily appropriated  or  divorced  from  the  citizenry,  as  with  some  natural  resource  wealth  and  foreign aid flows. We revisit this issue below. 2.2  Why Fight? Information Asymmetry and Incomplete Contracting One drawback of the typical contest model  is  that  insurrection  is  never  fully  deterred;  arming and fighting always occur in equilibrium. There is typically no decision to fight:  arming  and  fighting  are  one  and  the  same.  This  prediction  of  ever-present  conflict  is  unsatisfying since political competition over  power and resources is ubiquitous while violent conflict is not. Thus we turn to the determinants of compromise (and its breakdown). Creating  and  arming  organizations  is  costly  and  wars  are  destructive  and  risky.  Thus  a  fundamental  question  is  why  wars  ever occur at all. If the competing groups are  rational, both should prefer a bargained solution to destructive conflict. The  possibility  of  bargaining  under  the  threat  of  violence  is  embedded  in  leading  theories of political and institutional development.7 Acemoglu and Robinson (2001, 2006),  for instance, develop a model of elites competing with the poor for control of the state.  Elites  accommodate  the  poor  by  extending  the voting franchise in periods when the poor  can credibly threaten to revolt, and there is  no  violent  conflict  on  the  equilibrium  path.  Carles Boix (2003) develops a related model,  where  conflict  outbreaks  depend  on  shifts  in  the  military  capacity  of  a    evolutionary  r 7  Bargaining  models  of  conflict  proceed  from  micro- economic  theories  of  bargaining  where  parties  have  the  option of resorting to costly conflict if bargaining breaks  down  (see  John  Kennan  and  Robert  Wilson  1993  for  a  comprehensive survey). Union–firm wage negotiation and  pretrial  legal  settlement  in  wealthy  countries  have  been  the two most studied cases. Conflict models, however, do  not  assume  that  contracts  will  be  enforced  once  signed,  further  complicating  the  negotiation.  Barry  R.  Posen  (1993)  presents  a  theoretical  international  relations  perspective on ethnic conflict. 11 c   hallenger. Fearon (1995) famously outlined  three reasons why bargaining could fail, leading to inter-state war. First, leaders may not  always  behave  rationally—decisions  might  be based on emotion, or leaders may not fully  calculate  benefits  and  risks  (bounded  rationality). Second, leaders may be fully rational  but  not  internalize  the  full  cost  of  conflict  because of political agency problems. Third,  leaders  might  be  rational  and  internalize  costs, but find war unavoidable nonetheless. Almost  all  theoretical  work  focuses  on  this  third  case.  Fearon  highlights  three  mechanisms  consistent  with  “rational  war”:  (i) asymmetric information,  including  private  information  about  military  strength,  and  the  strategic  incentive  to  misrepresent  it  to  potential  opponents;8  (ii)  commitment problems, especially the inability of the parties  to  commit  to  deals  in  the  absence  of  a  third-party  enforcer;  and  (iii)  issue indivisibilities,  whereby  some  issues  do  not  admit  c   ompromise.  We  will  follow  the  literature  and focus attention on the first two.9 2.2.1  Information Asymmetries War  can  occur  when  one  side  overestimates  its  ability  to  win,  or  underestimates  its  opponent’s  strength  (Powell  2002).  But  asymmetric information is generally insufficient cause for war. After all, if both   arties  p have an incentive to make a deal, they should  also  have  incentives  to  gather  information  and  communicate  their  strengths  (Fearon  1995). For asymmetries to cause war among  8  This argument appears to originate with Dagobert L.  Brito and Michael D. Intriligator (1985). 9  Issue indivisibilities are considered a relatively minor  explanation  in  most  cases.  However,  Ron  E.  Hassner  (2003) argues that the indivisibility of sacred spaces may  be  one  reason  for  the  persistence  of  conflict  between  Israelis and Palestinians or Hindus and Muslims in India.  Robert Powell (2006) argues, however, that indivisibilities  are merely a special case of the commitment problem; if  commitment were possible, both sides would prefer a lottery that awards the contested indivisible prize with the  same odds as fighting, thus avoiding war’s destruction. 12 Journal of Economic Literature, Vol. XLVIII (March 2010) r   ational  actors,  accurate  disclosure  of  information must also be impaired. An incentive to  misrepresent one’s strength is the most commonly  theorized  mechanism,  such  as  when  a  state  exaggerates  its  strength  and  engages  in  (inefficient)  war  in  order  to  deter  future  opponents  from  insurrection.10  To  take  an  interstate  war  case  as  an  example,  Saddam  Hussein’s exaggeration of Iraq’s stock of weapons of mass destruction in 2002 could be seen  as  an  effort  to  mislead  opponents  and  deter  invasion—an effort that, nevertheless, failed. Such accounts are plausible but likely offer  only  half  an  explanation.  For  one,  relative  military strength should reveal itself quickly  on the battlefield. Information problems thus  provide  a  particularly  poor  account  of  the  many prolonged civil conflicts (Fearon 2004;  Powell 2006). Most models also assume just two actors.  Civil wars are seldom so simple. Joan Esteban  and  Ray  (2001)  develop  a  multiplayer  contest,  where  each  has  imperfect  information  about the others’ costs of conflict. With four  or  more  players,  Pareto-improving  social  decision  making  is  impossible  and  conflict  ensues.  Thus  information  asymmetries  may  be even more hazardous than the basic twoplayer  models  would  suggest.  Ray  (2009)  identifies  another  rational  route  to  conflict  when players are many, developing a model  of coalition formation under multiple threats  that shows that conflict may be unavoidable  even  in  a  world  with  complete  contracts.  Societies  divide  along  multiple  lines—by  class, geography, religion, or ethnicity—and  while  society  can  arrange  a  set  of  transfers  10  For  instance,  Barbara  F.  Walter  (2006)  shows  that  ethnic  groups  are  more  likely  to  seek  self-determination  if  a  government  has  acquiesced  to  earlier  autonomy  demands by other groups. A government that takes such  future externalities into account might find it worthwhile  to fight a costly war today to prevent secession, thus possibly  heading  off  future  conflicts.  The  relationship  also  suggests that war may not always be accurately modeled  as a two-player game.  that avoids a conflict along any one division,  it may be impossible to find an arrangement  that  simultaneously  prevents  conflicts  along  all divisions simultaneously.11 Also promising are recent attempts to integrate  asymmetric  information  with  other  theoretical  mechanisms.  Sylvain  Chassang  and Gerard Padro-i-Miquel’s (2008a, 2008b,  2009)  work  incorporates  such  asymmetry  into  a  contest  model  employing  a  global  games logic.12 Their key insight is that transient economic shocks increase the immediate  ncentives to fight but not the discounted  i present  value  of  victory.  The  model  thus  implies that in dire economic circumstances  groups predate upon one another since they  have  less  to  lose  than  in  periods  where  the  returns  to  production  are  higher.  Yet  conflict  is  also  possible  in  better  economic  times as asymmetric information on the true  economic  conditions,  and  first-strike  advantages  on  the  battlefield,  combine  to  generate mutual fears of preemptive attacks. The  framework is notable for its testable predictions: armed conflicts should follow negative  economic  shocks;  higher  and  less  volatile  national  incomes  are  associated  with  less  conflict; and expected future income growth  reduces the risk of war today.13 11  Motivated  by  warlord  politics  in  Tajikistan  and  Georgia, Jesse Driscoll (2008) models bargaining between  a president and multiple challengers. 12 Global games are associated with the work of Hans  Carlsson and Eric van Damme (1993) and Stephen Morris  and Hyun Song Shin (1998). 13 Chassang  and  Padro-i-Miquel  show  that  there  are  always economic conditions severe enough that civil conflict breaks out. In their notation, the size of the national  economic pie in period t is θt ∈ (0, ∞); c is the fraction of  production  destroyed  in  a  civil  war;  P  is  the  odds  that  a  fighting  side  will  prevail  if  conflict  breaks  out;  V V  is  the  continuation value if that side prevails in the war; VP is the  continuation value of the most peaceful Subgame Perfect  Nash Equilibrium; and  δ is the time discount rate. They  show that peace is only sustainable if  θt [1 − 2 P(1 − c)]  ≥  δ [PV V − VP ]. Since the right hand side of the expression  is strictly positive for plausible parameter values, there is  always an economic shock sufficiently bad (close to zero)  that violates this inequality. Blattman and Miguel: Civil War Dal Bó and Powell (2009) also show that  asymmetric  information  can  lead  to  war  in  the  context  of  pervasive  commitment  problems  without  relying  on  global  games.  The  government  has  better  information  on  its  wealth than challengers. As in Chassang and  Padro-i-Miquel,  they  show  that  government  attempts to buy off the opposition (and avoid  conflict by offering them a share of the pie)  fail  in  periods  of  lower  economic  activity,  since  the  challenger  fears  that  the  government is low-balling them. Commitment problems could further restrict the government’s  ability to secure peace by incorporating the  challenger into a power-sharing government  (since this would provide the challenger with  a  stronger  position  for  future  aggression).  Sandeep Baliga and Tomas Sjostrom (2004)  develop  a  related  imperfect  commitment  model,  in  which  private  information  about  each  fighting  side’s  propensity  to  arm  can  lead  to  arms  races  with  probability  close  to  one. 2.2.2  Commitment Problems and Incomplete Contracting The  most  intriguing  theories  of  civil  war  focus  on  the  cases  where  credible  commitments  to  peace  or  redistribution  cannot  be  made  even  with  complete  information— that is, at least one side faces an incentive to  renege once a settlement is reached (Walter  1997).  Such  circumstances  include  military  scenarios  with  a  first-strike  advantage,  and  instances  where  waging  war  today  can  prevent  one’s  opponent  from  gaining  military  strength in the future. Powell  (2006)  shows  formally  that  each  of  these  commitment  problems  is  rooted  in a single phenomenon: large shifts in the  future distribution of power. For a leading  example, consider a temporarily weak government  that  is  attempting  to  “buy  off ”  a  strong rebel group with transfers to secure  peace.  When  the  state  returns  to  relative  13 strength—  erhaps  because  of  a  rebound  p in  economic  activity,  foreign  aid  or  commodity  revenues—it  will  be  tempted  to  renege on its earlier bargain, thus limiting  the  amount  it  can  credibly  promise  to  the  rebel  group  today.  If  this  time-consistent  but more modest transfer is less than what  the  rebels  can  gain  by  fighting  today,  they  will  wage  war  now  to  lock  in  the  highest  possible payoff. Similarly,  a  commitment  problem  arises  when  one  party  can  permanently  alter  the  strategic  balance  of  power  by  waging  war  now  (Garfinkel  and  Skaperdas  2000;  Michael  McBride  and  Skaperdas  2007;  Powell  2006).  If  going  to  war  weakens  or  even  eliminates  a  rebel  group  for  all  time,  the state will gain a peace dividend since it  no longer needs to spend on arms to deter  future  conflict.  Thus  the  state  has  reason  to  wage  bloody  but  short  conflicts  if  peace  deals are not credible.14 The  commitment  problem  directly  suggests  that  civil  war  is  more  likely  to  occur  when  there  are  limits  to  conflict  resolution  and contract enforcement. Since formal legal  and  state  institutions  presumably  help  to  enforce  commitments  intertemporally,  societies with weak government institutions and  few checks and balances on executive power  should  empirically  be  those  most  likely  to  experience violent civil conflict (e.g., Fearon  and  Laitin  2003;  Eliana  La  Ferrara  and  Robert H. Bates 2001; Skaperdas 2008). This  14  This  approach  suggests  that  the  likelihood  of  war  is  affected  by  each  side’s  valuation  of  the  future  versus  the  present.  The  risk  of  future  retaliation—the  “shadow  of  the  future”—should  deter  sides  from  conflict.  When  future  returns  depend  on  present  success  on  the  battlefield,  however  (i.e.,  first-strike  advantages),  the  shadow  the future can increase the incentives for conflict. It can  also lead to war if a peace settlement is costly in terms of  expected future defensive arming. Greater intertemporal  discounting increases the likelihood of war in the first case  and  decreases  it  in  the  second  and  third  (McBride  and  Skaperdas 2007; Skaperdas and Constantinos Syropoulos  1996).  14 Journal of Economic Literature, Vol. XLVIII (March 2010) relationship may partially explain the widespread  occurrence  of  lengthy  civil  wars  in  sub-Saharan Africa, a region notorious for its  weak  state  capacity  and  limited  legal  infrastructure  (Bates  2001;  Bates  2008;  Jeffrey  Herbst 2000). Yet weak institutions and the absence of a  third-party enforcer alone are not sufficient  cause  for  civil  conflict.  The  theory  implies  that conflict is at least twice conditional: first  on  weak  institutions,  and  second,  on  future  shifts  in  relative  power  across  the  fighting  sides.  Future  empirical  models  must  begin  to  take  these  issues  into  account  more  seriously in testing. In  terms  of  policy,  the  theory  suggests  that  enforcement  of  contracts  by  the  international  community  can  potentially  substitute  for  weak  domestic  institutions  (Walter  1997).  Interventions  might  include  armed  peacekeepers,  the  provision  of  guaranteed  financial transfers to rebels by outside international  agencies,  and  the  threat  of  punishment  (including  trade  sanctions,  asset  freezes, and bombing) if either side reneges  on the peace deal. External  interventions  could  also  have  the opposite effect, however, and prevent an  ongoing war from reaching a credible peace  agreement.  For  instance,  the  recent  prosecution  of  Charles  Taylor  (former  warlord  and  President  of  Liberia)  and  indictment  of  Joseph  Kony  (head  of  Uganda’s  Lord’s  Resistance  Army)  by  international  courts  could make postwar power-sharing deals for  rebels  less  credible  in  the  future,  and  thus  extend  current  civil  wars  if  the  rebels  have  no  guarantee  that  putting  down  arms  will  shield them from prosecution in The Hague.  On  the  other  hand,  the  possibility  that  an  international  indictment  could  be  dropped  appears  to  have  been  one  of  the  primary  incentives for Kony to agree to a ceasefire and  begin negotiating peace in the first place. We  discuss  the  scattered  empirical  evidence  on  international interventions below. 2.3  The Microfoundations of Group Conflict Contest  models  and  rationalist  theories  of  civil  war  rely  upon  groups  behaving  as  unitary  actors,  strong  assumptions  considering  the  well-known  problem  of  collective  action (Mancur Olson 1971). To understand  the causes of war, we must also understand  how groups form, cohere, and persuade their  members to risk their lives.  2.3.1  Civil War and the Participation Problem Classic  solutions  to  the  collective  action  problem  use  “selective  incentives”  to  motivate participation, with material and pecuniary incentives the focus of most models (e.g.,  Grossman  1999).  Such  incentives  include  wages,  opportunities  to  loot,  promises  of  future  reward,  or  physical  protection  from  harm.  Economic  inequality  provides  a  possible  motive  for  conflict  to  the  extent  that  s   eizure of the state brings material gains to  the victors (Fearon 2007).  A literature on agrarian revolutions in the  1960s and 1970s argues instead that inequality  motivates  participation  in  rebellion  not  for  private  gain,  but  because  it  generates  frustration over inequality or the destabilization  of  traditional  social  systems  (James  C.  Davies 1962; Ted Robert Gurr 1971; Jeffery  M.  Paige  1975;  Roger  D.  Petersen  2001;  James  C.  Scott  1976).  By  these  accounts,  poverty, income inequality, and unmet economic  expectations  may  indeed  be  the  root  causes  of  conflict,  but  the  more  proximate  explanations  are  better  described  as  grievances.  Rather  than  deny  material  motivations,  these  accounts  provide  an  alternative  set  of  mechanisms  for  individual  participation in rebellion. Related nonmaterial incentives are thought  to be common within armed groups. Several  studies argue that a leader’s charisma, group  ideology, or a citizen’s satisfaction in pursuing  Blattman and Miguel: Civil War justice (or vengeance) can also help solve the  problem of collective action in rebellion (e.g.,  John E. Roemer 1985; Elisabeth Jean Wood  2003b).  These  unconventional  incentives  have  typically  been  the  subject  of  sociology  (Amitai Etzioni 1975; Olson 1971). A convenient  way  of  modeling  such  sentiments  in  a  rational framework is as “goods” of inherent  value that individuals consume by fighting.15 What  these  micro-level  approaches  often  ignore,  however,  is  that  fighting  is  not  the  only means by which individuals and groups  can  pursue  political  and  economic  change.  Walter  (2004)  argues  that  the  absence  of  a  nonviolent  means  for  achieving  change  is  also  often  necessary  to  incite  rebellion.  Nonviolent  political  alternatives  could  be  incorporated  into  the  decision  framework  facing  citizens,  leaders,  and  armed  groups,  generating  testable  predictions  about  the  relationship  between  political  institutions  and the likelihood of civil conflict.16 Such diverse selective incentives—pecuniary or not—are easily embedded in a principal–agent  framework.  A  leading  example  is  Scott  Gates  (2002),  who  models  how  rebel  leaders  can  use  material  incentives  alongside  ethnic  appeals  to  motivate  citizens  to  join and exert effort in the rebellion (i.e., to  satisfy  the  participation  and  incentive  compatibility constraints). His model emphasizes  how incentives and methods of recruitment  vary with ease of supervision; the greater the  distance—whether  geographic  or  social— between the leader and the recruit, the more  15  The  approach  closely  parallels  two  literatures.  One  is a branch of the voting literature that suggests the collective action problem inherent in participation in democratic elections (where the odds of affecting the outcome  are infinitesimal but voting has concrete costs) is overcome  by  the  value  some  individuals  place  on  the  act  of  voting  itself (Amrita Dhillon and Susana Peralta 2002; Timothy  J. Feddersen 2004). A literature on revolution emphasizes  the inherent value individuals place on retaliation against  an unjust state (Frantz Fanon 1961). 16  Matthew Ellman and Leonard Wantchekon (2000) is  a useful step in this direction. 15 difficult are supervision and punishment, and  the more likely that material incentives (e.g.,  looting) will need to be offered to recruits to  secure their cooperation. Threats and punishments can also be used  as  selective  incentives.  Coercive  recruitment  is  especially  common  in  African  insurgencies where, in the absence of a shared social  basis for mobilizing rural support, rebel leaders  resort  to  the  only  tool  at  their  disposal  (Thandika  Mkandawire  2002).  Michael  SukYoung  Chwe  (1990)  and  Bernd  Beber  and  Christopher Blattman (2008) model the use of  coercion and pain in a principal-agent setting,  and identify the conditions (and agent types)  where  it  is  optimal  for  armed  group  leaders  to  threaten  pain  instead  of  offering  rewards.  This consumption approach to nonpecuniary  incentives is analytically   onvenient and yields  c useful insights, such as the rationale for using  coercion  on  low  productivity  recruits  (especially children). Yet these models are unlikely  to capture the complex individual motivations  underlying  participation  in  armed  groups,  however,  and  thus  constitute  an  important  area for further research.  2.3.2  The Formation of Competing Coalitions The  models  reviewed  assume  that  rebel  and government groups exist and are actively  engaged  in  combat.  They  do  not  tackle  the  issue of how competing groups form and why  they  cohere.  An  emerging  literature  based  on the noncooperative theory of endogenous  coalitions  explores  the  distributional  basis  of  group  formation.  These  models  typically  assume  that  group  action  is  more  efficient  than  individual  action,  providing  citizens  with an incentive to join forces. These models also allow for conflict within each group  over  the  distribution  of  their  joint  surplus,  conflict  that  can  be  costly  for  the  individual.  Stable  groups  are  those  that  have  lowcost  mechanisms  for  distributing  the  gains,  such  as  property  rights  norms.  The  size  of  16 Journal of Economic Literature, Vol. XLVIII (March 2010) stable groups depends on the relative effectiveness  of  groups  at  managing  both  intergroup and intra-group conflict (e.g., Francis  Bloch, Sántiago Sánchez-Pagés, and Raphael  Soubeyran  2006;  Garfinkel  2004).  This  approach  is  a  promising  source  of  microfoundations  for  the  commitment  problems  discussed  above,  since  the  institutions  that  allow for within-group cooperation may also  mitigate intergroup conflict. Relaxing  the  unitary  actor  assumption  could  also  expand  the  range  of  rational  explanations for armed conflict. Information  problems  within  groups  could  lead  to  bargaining breakdowns (just as was the case for  asymmetric information across groups). Field  generals  have  incentives  to  mislead  civilian  leaders about the capability of their military  forces if they hope to keep the fighting going  for  longer  than  citizens  would  like  (to  keep  military budgets at high levels, for instance). Alternatively,  the  possibility  that  groups  might  split  could  exacerbate  commitment  problems:  signing  a  peace  deal  with  a  rebel  group leader is of limited value if hard-liners  are able to secede and continue fighting.17 The  existence of splinter factions may explain the  reluctance of fighting sides to enter into peace  talks  and  cause  such  talks  to  fail.  Stephen  John Stedman (1997) argues that the greatest  risk  for  peace  negotiations  comes  from  such  “spoilers”:  “leaders  and  parties  who  believe  that peace emerging from negotiations threatens their power, worldview, and interests, and  use violence to undermine attempts to achieve  it”  (p.  5).  Ray  (2007;  2009)  and  Acemoglu,  Georgy Egorov, and Konstantin Sonin (2009)  discuss coalitional stability when such deviations and counterdeviations can occur. 17  For example, Stathis N. Kalyvas (2000) argues that  internal divisions between moderates and radicals within  Algeria’s Islamist FIS party, and the moderates’ inability  to  make  binding  policy  commitments  to  reassure  antiIslamist elements of the national army, contributed to the  outbreak of civil war there after FIS won the 1991 national  election. 2.3.3  Ethnic Groups and Conflict Ethnic nationalism is popularly viewed as  the leading source of group cohesion and (by  extension)  intergroup  civil  conflict;  of  709  minority ethnic groups identified around the  world, at least 100 had members engage in an  ethnically  based  rebellion  against  the  state  during 1945 to 1998 (Fearon 2006). But why  do  ethnic  groups  themselves  form,  cohere,  and  sometimes  engage  in  such  violence?  A  full review of the literature on the formation  of  ethnicity  and  ethnic  conflict  is  beyond  the scope of this paper, but an outline of the  main ideas merits discussion.18 “Primordialist”  arguments  stress  the  deep  cultural,  biological  or  psychological  nature  of  ethnic  cleavages,  whereby  conflict  is  rooted  in  intense  emotional  reactions and feelings of mutual threat (Donald  L.  Horowitz  1985).  Economic  models  that  assume  individuals  prefer  to  mingle  with  co-ethnics  (or  share  political  preferences)  might  be  construed  as  primordialist  in  nature  (Alesina,  Reza  Baqir,  and  William  Easterly 1999; Alesina and La Ferrara 2000;  Esteban  and  Ray  1999).  There  are  clear  parallels  to  the  models  of  group  formation  discussed above: co-ethnic preferences can  augment intragroup mechanisms of communication and cooperation, while interethnic  animosities may exacerbate information and  commitment problems.19 18  For  overviews  of  ethnic  mobilization  and  violence  see  Laitin  (2007),  Fearon  (2006),  and  Bates  (2008).  On  ethnic divisions and economic performance, see Alberto  Alesina and La Ferrara (2005) and Pranab Bardhan (1997;  2004).  19 Alternatively, as with the grievances discussed above,  ethnic  violence  might  have  inherent  utility  value.  In  the  extreme case, we could even reject the rationalist assumption entirely that opposing ethnic groups prefer to reach a  peaceful solution. However, we believe the goals of formal  economic theory here should go beyond simply assuming  that a taste for violence drives civil conflict, to uncover the  deeper economic, political and social factors at play. Blattman and Miguel: Civil War Even if ethnic identities are not primordial  and inter-ethnic animosities are absent, ethnicity may still facilitate strategic coordination  and enforcement. Ethnic groups often exhibit  dense social networks and low cost information and sanctioning, and may have identifiable  characteristics  that  allow  outsiders  to  be  excluded  from  public  goods  (Francesco  Caselli  and  Wilbur  John  Coleman  2006;  Fearon  and  Laitin  1996;  Edward  Miguel  and  Mary  Kay  Gugerty  2005).  Fearon  and  Laitin  (1996)  show  that  better  within-group  cohesion  can  facilitate  peace  deals  between  ethnic groups. Alesina and La Ferrara (2005)  also  speculate  that  ethnically  homogenous  groups  possess  a  production  advantage  that  augments their incentives to associate. Bates  (1986) argues that shared language and customs facilitate organization. Finally, Esteban  and Ray (2008) suggest that ethnic alliances  have  a  distinct  advantage  over  class  alliances  in  mobilizing  for  conflict.  While  class  and ethnic groups both possess shared social  identities, only ethnic groups exhibit withingroup economic inequality: inequality allows  the rich to supply conflict capital (e.g., guns)  while the poor supply conflict labor. Finally,  “modernist”  theories  stress  that  ethnic conflict arises when groups excluded  from  social  and  political  power  begin  to  experience  economic  modernization  (Bates  1986; Ernest Gellner 1983)—a situation that  parallels Powell’s (2006) account of shifts in  future  power  leading  to  bargaining  breakdowns today. 2.4  Challenges and Areas for Further Work Most real-world disputes are settled, even  among antagonistic ethnic groups. Thus the  theoretical  apparatus  described  above  is  plausible: conflict is rooted in endemic competition  for  resources  across  groups,  with  bargained  solutions  occasionally  breaking  down because of commitment or information  problems. Persuasive though this framework  may be in many circumstances, there remain  17 many challenges and areas for further theoretical investigation. 2.4.1  Disentangling Competing Accounts Existing  formal  theories  of  conflict  yield  falsifiable predictions, but few articulate the  precise empirical tests that would distinguish  among  alternative  mechanisms.  Income  volatility  is  one  example.  In  the  theories  we  consider above, a negative aggregate income  shock is associated with an increase in armed  conflict  in  various  models,  including  those  that  emphasize  the  diminished  opportunity  costs of soldiering (Gates 2002, Chassang and  Padro-i-Miquel  2009),  weaker  state  repressive capacity (Fearon and Laitin 2003), or the  role  of  asymmetric  information  (Chassang  and  Padro-i-Miquel  2008a).  Meanwhile,  a  negative aggregate income shock is associated  with a decrease in conflict risk in models that  stress capturing the state and its revenues as  a  prize  (e.g.,  Garfinkel  and  Skaperdas  2007;  Grossman  1999).  Finally,  income  volatility  in  either  direction  could  inhibit  credible  bargaining  and  commitments  if  it  is  associated with rapid shifts in power across groups  (Powell 2006), or gives rise to worse information about current economic conditions (Dal  Bó  and  Powell  2009).  Few  theories  model  more than one of these dynamics or identify  the empirical predictions that will adjudicate  among competing accounts. One exception is Dal Bó and Dal Bó (2004),  who  distinguish  between  shocks  to  different  economic sectors. This theory is an improvement  over  single-sector  models,  yet  even  so,  alternative  mechanisms  and  interpretations  are still possible. For instance, if higher capital-intensive good prices fail to increase conflict, it might be because greater state capacity  (associated with higher government revenue)  dominates  the  state-as-prize  effect.  If  civil  war is the result of a bargaining breakdown,  there are good theoretical reasons to believe  that  events  such  as  price  shocks  have  differential  effects  on  civil    onflict  depending  on  c 18 Journal of Economic Literature, Vol. XLVIII (March 2010) the local institutional setting, the number of  already existing armed groups, and the future  shifts in power across political groups likely  to result. Future theoretical work should follow the lead of this paper in helping us pinpoint the empirical patterns that distinguish  between alternative mechanisms. 2.4.2  Understanding Grievances At  present,  the  economic  motivations  for  conflict are better theorized than psychological  or sociological factors. Individual preferences  in existing models typically include only material  rewards  and  punishments.  One  implication is that we have not derived the falsifiable  predictions that distinguish between material  and    on-material    heoretical  accounts.  Thus  n t we  cannot  discard  non-economic  explanations  for  conflict.  Take  the  role  of  economic  inequality,  for  example.  The  unequal  distribution  of  resources  can  generate  material  incentives for a relatively poor group to seize  control of the state. More than one historical  account,  however,  emphasizes  citizens’  emotional and ideological outrage over inequality  as a prime motivation for engaging in violent  collective  action.20  While  the  reduced-form  prediction  that  greater  economic   nequality  i leads to armed conflict is unchanged in either  case, the relationship could be  nterpreted as  i evidence of either “greed” (economic motivations) or “grievance.” Christopher  Cramer  (2002)  critiques  the  conflict literature for its tendency to use such  reduced-form  empirical  relationships  to  buttress  economic  interpretations,  arguing  that  the  underlying  relationships  between  economic, social, and psychological factors are far  more complex. He stresses Antonio Gramsci’s  (1971)  definition  of  “economism”:  presenting  20  Barrington  Moore  (1993),  for  instance,  has  argued  that  Nazi  fascism  and  anticapitalist  rhetoric  stirred  anger  in  German  peasants  over  the  perceived  control  of  resources  by  a  supposedly  hostile  Jewish  elite.  A  similar  dynamic  was  at  work  during  the  anti-Tutsi  genocide  in  Rwanda in 1994 (Scott Straus 2006). causes  as  immediately  operative  that  in  fact  only  operate  indirectly,  and  thus  overstating  proximate  causation.  Understanding  these  complex  relationships  is  crucially  important  for  preventing  armed  conflicts.  Innovative  ways  of  modeling  and  measuring  individual  political  grievances  are  required  to  make  progress  on  this  agenda.  Yet  in  the  end,  our  measures may fail to capture the relevant variation. Grievances are fluid and the case literature  points  to  the  evolution  of  identities  and  norms during wartime (Wood 2003a).   Recent  behavioral  and  experimental  economic research argues that notions of fairness  and  grievance  are  salient  in  individual  decision  making.  There  is  growing  lab  evidence  that  individuals  have  a  taste  for  punishing  social  norms  violations  and  are  willing  to  incur  nontrivial  private  costs  to  do  so.  This  willingness to punish unfair behavior appears  to  have  neural-physiological  underpinnings  (Dominique J.-F. de Quervain et al. 2004) and  is consistent with preferences for equity (Gary  Charness  and  Matthew  Rabin  2002;  Ernst  Fehr and Klaus M. Schmidt 1999). Jung-Kyoo  Choi  and  Samuel  Bowles  (2007)  argue  that  altruistic  preferences  favoring  one’s  in-group  may  have  conferred  an  evolutionary  advantage.  Such  within-group  social  preferences  could reduce the local collective action problem inherent in mobilizing armed groups by  lowering the cost of sanctioning free riders.21  21  The taste for violence may differ from the taste for  punishing  others  monetarily,  but  the  experimental  economics  literature  has  not  to  our  knowledge  carried  out  similar  research  on  individual  preferences  for  inflicting  violence  on  others.  Given  the  inherent  human  subjects  issues,  observational  data  on  perpetrators  of  violence  is  a  more  promising  avenue  here.  Sociological  and  psychological understandings of interpersonal violence contrasts  sharply with the rational choice approach we emphasize in  this article. Sociologist Randall Collins (2008) argues that  most interpersonal and combat violence is characterized  by a short and confused belligerent “haze”: actors are emotionally overwhelmed with tension and fear, and violence  is  perceived  as  the  resolution  of  this  fear.  Meanwhile,  some public health and psychology evidence suggests that  much violence is “shame-induced” (James Gilligan 2000).  Blattman and Miguel: Civil War 2.4.3  Disaggregating Institutions The commitment problem is a persuasive  explanation  for  civil  war.  Unfortunately,  we  have  a  poor  understanding  of  the  specific  political  and  legal  institutions  capable  of  enforcing commitments and facilitating compromise  between  competing  groups.  Some  theories  emphasize  the  importance  of  market  promotion  and  tax  levying  (Besley  and  Persson  2008b),  and  others  property  rights  and  the  rule  of  law  (Garfinkel  2004).  Still  others  emphasize  the  role  of  international  institutions and the threat of external intervention,  others  the  internal  legitimacy  of  the state (e.g., the rule of a minority ethnic  group, whether in Tutsi Rwanda or apartheid  South Africa, could be particularly destabilizing).  Meanwhile,  Powell  (2006)  emphasizes  institutions  that  help  manage  rapid  shifts in power, an example of which might  be  the  ability  of  elites  to  extend  or  retract  the  democratic  franchise,  as  in  Acemoglu  and  Robinson  (2001,  2006).  The  “institutions” concept needs to be better disaggregated and tested to be useful in the civil war  literature. Barry  R.  Weingast  (1997),  Bates  (2008)  and  Bates,  Avner  Greif  and  Smita  Singh  (2002)  argue  that  the  incentives  and  constraints  facing  leaders  are  crucial,  and  in  particular  that  rulers  loot  the  state  when  the  long-term  costs  of  doing  so  are  low.  Institutions  shape  these  costs  as  well  as  the  ruler’s  time  horizon  and  discount  rate.  Paradoxically,  institutions  that  extend  a  ruler’s  horizon,  such  as  the  elimination  of  term  limits  or  the  weakening  of  political  competition, may increase the incentives for  supporting political order, so the ruler can  extract rents over a longer time. Conversely,  Bates (2008) argues that international pressure  for  African  states  to  democratize  in  the 1990s increased disorder, since it shortened leaders’ horizons at the same time that  foreign  aid  flows  were  reduced;  with  few  19 institutional checks on their power, African  rulers had incentives to predate. These  arguments  meld  with  a  growing  comparative  politics  literature  on  state  failure  and  “warlordism”  in  the  late  twentieth  century.  In  a  study  of  civil  war  in  Liberia,  Sierra  Leone,  and  Guinea,  Amos  Sawyer  (2004,  2005)  emphasizes  the  large  spoils  from  power  combined  with  the  absence  of  checks  and  balances  on  the  executive  as  the  primary  cause  of  war  in  those  nations.  William Reno (1999) also examines the internal  dynamics  of  “warlord  states”  in  Sierra  Leone, Nigeria, the Democratic Republic of  Congo, and Liberia. Like Bates, Reno argues  that,  in  the  presence  of  resource  wealth,  a  weakened  state,  less  foreign  aid,  and  pressures for economic liberalization, strongmen  found  it  optimal  to  deinstitutionalize  the  state and formal bureaucratic mechanisms in  favor of a parallel “shadow state” under their  own control. 2.4.4  The Conduct and Organization of Civil War Another  important  area  of  study  is  the  conduct  of  rebellion,  investigating  what  factors and initial conditions influence a group’s  formation,  recruitment  strategies,  fighting  tactics,  and  internal  organization.  One  goal  is  to  describe  the  logic  of  civil  war  and  violence—a  reaction  to  the  view,  popularized  by  journalism  and  some  international  relations  scholars,  that  the  brutal  violence  that  c   haracterizes much of modern civil warfare is  a product of illogical barbarism unrestrained  by  economic,  political  or  social  structures  (e.g.,  Mary  Kaldor  1999;  Robert  D.  Kaplan  1994). Rebel  groups  are  large,  self-sustaining  indigenous  organizations  in  societies  where  effective  organizations  (including  private  firms) are rare; understanding the glue that  holds them together should be a top research  priority. One strand of recent research applies  contract  theory  to  theories  of    ecruitment.  r 20 Journal of Economic Literature, Vol. XLVIII (March 2010) Some of these, already discussed above, focus  on  how  armed  groups  motivate  recruits  to  fight (e.g., Beber and Blattman 2008; Gates  2002, 2004). Weinstein (2005b, 2007) develops a theory linking a rebel group’s social and  economic endowments to its composition and  tactics. He argues that groups rich in material resources are flooded with opportunistic  joiners with little commitment to the civilian  population,  while  armed  organizations  with  ideological “resources,” like a strong sense of  common identity, tend to attract more committed soldiers.22 Armed  group  cohesion  is  the  subject  of  a  large  body  of  work  in  military  sociology  and  history.  Rather  than  focusing  on  economic  incentives,  this  literature  emphasizes  the  powerful role of group socialization and social  identity in generating solidarity, commitment,  and a willingness to risk one’s life (see Paul D.  Kenny 2008 for a review). Influential organizational  devices  include  the  creation  of  new  identities  among  recruits  and  unit  solidarity  (Richard  A.  Gabriel  and  Paul  L.  Savage  1979;  Edward  A.  Shils  and  Morris  Janowitz  1948)  and  systems  of  command  and  control  (Robert  Sterling  Rush  1999,  2001;  Martin  Van Creveld 1982). This emphasis on organization-level dynamics in state militaries contrasts  with  the  emphasis  on  individual-level  motives often used to explain participation in  nonstate  groups;  we  believe  both  literatures  could gain from an exchange of perspectives.  Two such crossovers are Francisco Gutiérrez  Sanín (2008), who examines Colombian paramilitary  and  guerrilla  groups,  and  Wood  (2008), who discusses how armed groups have  22  The  contrast  between  the  Revolutionary  United  Front (RUF), funded through diamond mining and smuggling,  and  the  community-supported  Civilian  Defense  Forces  (CDF)  in  Sierra  Leone’s  recent  civil  war  provides  an  illustration  of  this  divergence.  L.  Alison  Smith,  Catherine  Gambette  and  Thomas  Longley  (2004)  show  that  the  RUF  was  much  more  likely  to  commit  human  rights  abuses  against  civilians  than  the  CDF.  See  David  Keen (2005) for a careful discussion of the Sierra Leone  civil war. constructed identities and reconfigured social  networks in El Salvador, Peru, Sierra Leone,  and Sri Lanka. Fearon (2007) asks why we tend to see the  sustained survival of many small and lightlyarmed  guerrilla  groups,  each  with  little  chance  of  capturing  political  power  (Congo,  Sudan  and  Uganda  are  countries  where  this  has  been  true).  He  constructs  a  contest  success function with decreasing returns to scale  for  rebels  over  some  size  range—in  other  words, above some size, each additional rebel  increases  the  probability  the  rebel  group  is  detected,  denounced,  or  destroyed  by  the  government,  and  this  effect  outweighs  the  fighting benefits of greater size (at least up to  some  point).23  Powell  (2007)  is  perhaps  the  best  articulated  formal  attempt  to  get  inside  the black box of armed groups’ fighting strategies.  He  models  optimal  military  spending  across potential targets (e.g., cities or fighting  units)  by  a  government  fearing  rebel  attack,  and is able to decompose such spending into  a defensive effect, a deterrence effect, and a  cost effect. Finally, other models help to explain rebel  violence  directed  at  civilians.24  Jean-Paul  Azam  (2002,  2006)  formalizes  a  strategic  logic  whereby  an  armed  group  engages  in  looting to reduce the returns to non-military  labor effort for potential recruits (thus making them more likely to join the group), while  simultaneously  generating  spoils  to  reward  existing  recruits.  The  logic  of  violence  against civilian populations is the subject of  a growing literature in political science (see  Kalyvas  2006  for  a  review).  In  work  based  on  a  comparative  study  of  irregular  civil  wars (i.e., guerrilla wars) in the past century,  Kalyvas (2006) argues that rival sides prefer  23  The  sensitivity  of  results  to  such  functional  form  assumptions calls out for more research investigating the  micro-foundations of contest success functions. 24  See Straus (2007) for a review of the related literature on the perpetrators of violence. Blattman and Miguel: Civil War to  use  selective  rather  than  indiscriminate  violence  to  punish  “defectors,”  or  civilian  enemies  and  informers.  In  the  absence  of  information, both sides rely on local collaborators to denounce defectors. Kalyvas argues  that  selective  violence—including  violence  related  to  private,  not  political  motives—is  most  widespread  in  zones  where  each  side  holds significant force but lacks full control.25  Finally,  recent  studies  examine  the  use  of  sexual violence by armed groups (Dara Kay  Cohen 2008; Wood 2006; 2009). This  collection  of  theories  just  scratches  the  surface  of  the  recruitment  of  fighters  and  organization  of  civil  warfare.  This  area  remains  one  of  the  most  promising  and  understudied  areas  in  the  literature  on  conflict,  and  is  ripe  for  the  application  of  advances  in  contract  theory,  corporate  finance, behavioral economics and industrial  organization  (Jean  Tirole  1988,  2006).  New  evidence to motivate and test these theories  is discussed in section 3. 2.4.5  Departures from the Rational Model As  we  discuss  below,  existing  empirical  models  of  conflict  have  limited  explanatory  and  predictive  power.  We  can  draw  at  least  three  possible  conclusions  from  their  r   elatively  weak  performance.  First,  the  determinants  of  war  could  be  understood  within  standard  rational  choice  frameworks  but simply difficult to measure. In this case  our prime focus as researchers should be to  improve  data  and  measurement.  To  some  extent this is already happening.  Second,  war  could  have  idiosyncratic  causes,  attributable  to  chance,  singular  circumstances,  or  unsystematic  “irrational’  behaviors  by  leaders,  encompassing  errors  in  decision  making,  personality  defects,  25  In  contrast,  according  to  Kalyvas,  the  most  heavily  contested  zones  are  likely  to  be  relatively  peaceful  because denunciations will be deterred by the likelihood  of immediate retribution. 21 and  so  forth  (Erik  Gartzke  1999).  Such  an  account  is  not  inconsistent  with  formal  theory.  Models  are  seldom  intended  to  be  deterministic but rather to describe general  tendencies. Civil war outbreak is a relatively  rare  event  and  thus  it  is  conceivable  that  the  basic  formal  logic  is  right  but  at  least  some civil wars are in fact costly mistakes.  Indeed,  the  historical  literature  is  replete  with  leaders’  passions,  fallibility,  and  ideology;  historians  often  attribute  war  and  peace  to  the  attributes  of  individuals  like  Hitler  or  Gandhi.  Some  possibilities  for  incorporating these issues into formal models  already  exist.  For  instance,  uncertainty  over  whether  an  opposition  leader  is  an  “irrational”  type  would  affect  strategies  in  models of asymmetric information. Third, wars could have determinants that  are  outside  the  simple  rational  framework,  but systematically so. Some obvious explanations are still consistent with rational models,  such  as  a  leader’s  failure  to  internalize  the  full  social  costs  of  war—a  possibility  raised  by  Fearon  (2004)  and  recently  modeled  by  Matthew  O.  Jackson  and  Massimo  Morelli  (2007) in the context of inter-state war. They  show it only takes one “biased” leader (in the  sense  that  their  returns  to  war  differ  from  their citizens’) for war to break out between  opposing states.  A related possibility is that leaders are vulnerable to systematic errors in decision-making,  such  as  overestimating  their  chance  of  winning  (overconfidence),  time-inconsistent  preferences,  or  other  types  of  predictable  “irrational”  behavior.  In  such  cases,  formal  models of conflict may be fertile ground for  application of advances in theoretical behavioral  economics.  Efforts  to  incorporate  psychological  factors  and  misperception  into  international relations theory include Robert  Jervis  (1976)  and  Jack  S.  Levy  (1997),  but,  to the best of our knowledge, these insights  have  yet  to  be  applied  to  formal  models  of  civil war. 22 Journal of Economic Literature, Vol. XLVIII (March 2010) New  empirical  evidence  suggests  that  political  leaders  often  do  matter.  Benjamin  F.  Jones  and  Benjamin  A.  Olken  (2009)  compare  successful  to  failed  assassination  attempts, and find that the unexpected assassination  of  leaders  tends  to  enflame  lowscale  conflicts  and  diminish  high-intensity  conflicts. Similarly, the unexpected death of  rebel leader Jonas Savimbi is widely viewed  as the event that directly ended Angola’s war,  so  much  so  that  Massimo  Guidolin  and  La  Ferrara (2007) use his death in an event study  of  war’s  termination  on  diamond  company  stock returns. While we think that economic  theory should probably refrain from pinning  too  much  on  personalities,  the  econometric  evidence  just  cited  means  that  leadership  cannot be entirely ignored. This  example  on  the  role  of  leaders  suggests  that  certain  determinants  of  conflict  outside standard models are observable and  testable,  and  thus  could  be  a  basis  for  new  theory. Furthermore, an important possibility  seldom  discussed  in  the  recent  formal  theoretical literature is that complex, unsystematic,  and  difficult  to  observe  forces  may  greatly  influence  the  outbreak  of  war,  and  make  a  single  general  economic  theory  of  civil  war  impossible  to  craft.  The  need  for  intellectual humility is taken for granted by  many civil war scholars (e.g., Cramer 2007).  Even if observable structural factors remain  important, the existence of other influences  will  complicate  empirical  testing,  especially  in  the  statistical  analysis  of  relatively  rare  events. We now turn to the evidence, where  the  implications  of  these  and  other  estimation challenges are discussed. 3.  Evidence on the Causes of Conflict The  correlates  of  war  are  by  now  wellestablished. Civil war is more likely to occur  in countries that are poor, are subject to negative  income  shocks,  have  weak  state  institutions,  have  sparsely  populated  peripheral  regions,  and  possess  mountainous  terrain.  Ultimately,  empirical  work  should  aim  to  distinguish which of the competing theoretical  mechanisms  best  explain  the  incidence,  conduct, and nature of civil war, but this goal  is  still  far  from  being  realized.26  We  have  limited  evidence  on  the  relative  influence  of  the  commitment  problems  and  information asymmetries so central to formal theory.    In  many  cases  it  is  still  not  clear  which  of  the above correlates actually cause war and  which are merely symptoms of deeper problems,  and  we  have  yet  to  solve  the  puzzles  of participation, collective action, and group  cohesion laid out above. 3.1  Cross-Country Evidence Cross-country  regressions  dominate  the  conflict literature, and no discussion of civil  war  empirics  is  complete  without  reference  to  the  seminal  contributions  of  Collier  and  Hoeffler (1998; 2004) and Fearon and Laitin  (2003). Collier and Hoeffler ignited interest  among  economists—and  heated  disagreement  among  scholars  in  other  fields—with  a  simple  argument:  political  grievances  are  universal  but  the  economic  incentives  to  rebel  are  not,  and  these  latter  factors  are  often  decisive.  Scores  of  papers  have  f   ollowed  in  their  footsteps,  most  sharing  a  handful  of  traits:  a  dependent  variable  that  indicates war onset or incidence, proxy variables representing possible causes of conflict,  and a regression-based test of these competing determinants. Collier  and  Hoeffler  broadly  root  their  empirical  model  in  a  contest  model  of  conflict,  and  find  several  variables  with  robust,  positive correlations with conflict incidence.  First,  slow  current  economic  growth  is  26  Other  recent  reviews  of  the  empirical  literature,  often  spanning  economics  and  political  science,  include  Collier  and  Hoeffler  (2007),  Macartan  Humphreys  (2003),  Patricia  Justino  (2007),  Kalyvas  (2007),  Nicholas  Sambanis (2002), and Wood (2003a). Blattman and Miguel: Civil War a   ssociated with conflict, as is the proportion  of natural resources in total exports. Higher  levels of secondary school attainment in the  population, in contrast, are associated with a  lower risk of civil war. Meanwhile, a country’s  ethnic  fractionalization,  income  inequality,  and  democracy  are  not  statistically  significant  predictors  of  conflict  risk  conditional  on  these  other  factors.  Collier  and  Hoeffler  conclude that economic forces, primarily the  ability  to  organize  and  finance  a  rebellion  (as  captured  in  their  economic  growth  and  schooling variables, and the   bility to exploit  a natural  resources)  most  strongly  predict  whether civil war occurs. Fearon  and  Laitin  (2003)  take  a  closely  related  cross-country  approach.  Their  core  regression, while not derived explicitly from  theory, became the standard formulation for  most  cross-country  work  that  followed.  It  resembles the logit specification in equation  2, where the dependent variable, ONSETit, is  an indicator for the onset of civil war in country  i  in  year  t;  CWit  is  an  indicator  for  the  incidence  of  civil  war  (which  equals  one  in  onset and all active war years); yi,t−1 is lagged  per  capita  income;  and  Xit  is  a  vector  of  K  population,  geographic,  political  controls  (including  democracy  measures)  and  social  variables  (including  ethnic  and  religious  fractionalization): (2)    ONSETit = Λ(β 0 + β1 CWi,t−1   + β 2 yi,t−1 + Xit β K + εit). ′ Like  Collier  and  Hoeffler,  Fearon  and  Laitin  find,  first,  that  conditions  favoring  insurgency,  like  rough  terrain,  increase  the likelihood of civil war, and second, that  proxies  for  political  “grievances”  (e.g.,  ethnic and cultural diversity) have little predictive power. Yet Fearon and Laitin also argue  that  proxies  for  state  institutional  capacity  and  strength—most  importantly,  per  capita  income—are  robust  predictors  of  civil  war.  23 They  conclude  that  war  is  engendered  by  weak central governments and environmental conditions favoring insurgents. How do these two papers reach different  conclusions with similar data and econometric  techniques?  Most  importantly,  the  two  studies  attach  different  interpretations  to  key variables like per capita income. Collier  and Hoeffler link it to the opportunity costs  facing  potential  rebels,  while  Fearon  and  Laitin  emphasize  its  correlation  with  state  capacity.  Yet  neither  of  these  two  “pure”  i  nterpretations is entirely justified given the  evidence at hand. The link between income  levels  and  armed  conflict  is  theoretically  complex,  and  finer-grained  data—say,  on  incomes  that  revert  to  the  state  versus  the  citizenry,  or  actual  longitudinal  measures  of state capacity—is required to distinguish  between these interpretations. Second,  the  authors  differ  in  how  they  code  civil  wars.  Sambanis  (2004)  examines  the  four  competing  datasets  and  finds  five  main differences: (i) in thresholds of violence  required to be defined as a civil war; (ii) the  definitions  of  war  beginnings  and  endings;  (iii)  in  their  treatment  of  ‘internationalized’  civil  war  (where  there  is  some  involvement  by outside parties); (iv) in their treatment of  related forms of conflict (e.g. communal violence or state repression); and (v) the underlying  data  sources  they  draw  from.27  Both  Collier and Hoeffler and Fearon and Laitin  examine conflict  onset, albeit with different  definitions  of  war.  Other  options,  however,  27  The coding of civil wars and conflicts remains problematic.  Increases  in  conflict  intensity  are  generally  not  captured,  except  by  the  25  and  1,000  death  thresholds  in  the  PRIO/Uppsala  data.  Some  civil  “conflicts”  may  include low level violence that by other criteria would not  be  considered  a  war  (e.g.,  crackdowns  by  federal  police  on drug gangs). Cramer (2007) reviews other challenges,  including: a large-country reporting bias (where it is easier  to meet the battle death threshold); the emphasis on battle  deaths  (omitting,  for  instance,  civilian  killings,  refugee  movements, and state repression); and difficulties of differentiating conflict lulls from true termination of conflict. 24 Journal of Economic Literature, Vol. XLVIII (March 2010) include conflict incidence (including all years  of  war  in  the  analysis)  or  conflict  duration.  These  three  approaches  can  be  applied  to  at  least  four  different  civil  war  datasets,  to  create  twelve  possible  dependent  variables.  These  datasets  do  not  always  agree  on  the  coding  of  war  and  correlation  coefficients  across datasets range from 0.96 down to 0.42  (with an average of 0.68).28  A  third  source  of  inconsistent  results  lies  in  the  somewhat  ad  hoc  empirical  models  typically used. In this way the cross-country  conflict literature mirrors the earlier debate  assessing  the  causes  of  economic  growth,  where there was also little agreement on the  correct econometric specification (e.g., Ross  Levine and David Renelt 1992). Authors vary  in  their  use  of  annual  versus  five-year  periods,  corrections  for  time  dependence,  the  treatment  of  ongoing  war  years,  the  appropriate  estimator  for  rare  events,  the  use  of  country fixed effects, and so forth.29  Fourth,  estimates  are  sensitive  to  the  explanatory  variables  employed.  Hegre  and  Sambanis  (2006)  test  the  sensitivity  of  estimates  to  changes  in  the  conditioning  set,  using  the  approach  popularized  in  Xavier  Sala-i-Martin  (1997),  and  identify  a  few  robust correlates of  civil war onset:  low  per  capita  income,  slow  income  growth,  rough  28  See Sambanis (2004). These correlations of conflict  onset are likely to exaggerate differences in conflict incidence  (since  datasets  may  disagree  on  the  exact  year  of  conflict  initiation).  This  difficulty  and  inconsistency  in  pinpointing onset will frustrate attempts to relate conflict  onset  to  time-varying  explanatory  variables  more  than  time-invariant ones. The four most common datasets that  Sambanis explores are: the Correlates of War (COW) (J.  David Singer and Melvin Small 1994), Fearon and Laitin’s  (2003) dataset, PRIO/Uppsala (Gleditsch et al. 2002), and  Sambanis’s dataset (2004). 29 On  time-dependence  and  dynamics,  see  Nathaniel  Beck  and  Jonathan  N.  Katz  (2004)  and  Beck,  Katz,  and  Richard  Tucker  (1998).  On  logistic  regression  with  rare  events  data,  see  Gary  King  and  Langche  Zeng  (2001).  For other issues, see the discussion in Håvard Hegre and  Sambanis (2006). terrain, large population size,30 recent political  instability,  small  government  militaries,  and war-prone neighbors. Yet many of these  variables  are  plausibly  endogenous,  biasing  other estimates in unknown directions. Finally,  the  country  level  of  analysis  has  inherent  limitations.  Individual-  and  grouplevel  conflict  factors,  such  as  poverty  or  ethnic  hostility,  are  imperfectly  tested  at  the  national  level  (Sambanis  2004).  In  such  cases, cross-country evidence (or the absence  of  evidence)  should  be  regarded  with  caution. As we discuss in the next section, microlevel  data  is  likely  to  yield  more  convincing  answers  to  the  fundamental  theoretical  questions. In our view, other analytical tools,  from case studies to historical analysis, also  remain useful. 3.1.1  Recent Cross-Country Empirical Advances Recent  cross-country  research  focuses  on  improving  causal  identification  and  measurement. The search for exogeneity.  The  correlations  of  civil  conflict  with  both  low  income  levels and negative income shocks are arguably  the  most  robust  empirical  patterns  in  the literature cited above, but the direction  of  causality  remains  contested.  Even  the  use of lagged national income growth (as in  earlier  studies)  does  not  eliminate  this  concern,  since  the  anticipation  of  future  political instability and conflict can affect current  30  The  finding  on  population  size  suggests  a  possible  link  between  population  pressure—with  its  resulting  resource  scarcity  and  environmental  degradation—and  civil conflict, a theory that dates back to at least Malthus  (for  a  review  see  Thomas  F.  Homer-Dixon  1999;  Colin  H.  Kahl  2006).  This  population  pressure  hypothesis  is  related  to  the  hypothesis  that  poverty  increases  armed  civil conflict risk, where rapid population growth could be  one driver of lower per capita income. The link between  population  and  conflict  is  complex,  however,  and  could  represent several causal factors (as well as systematic measurement error arising from the coding of battle deaths).  See Gleditsch (1998). Blattman and Miguel: Civil War investment  behavior  and  thus  living  standards.31  Another  way  of  saying  this  is  that  there are likely to be permanent fixed differences between countries that are correlated  with  their  income  levels,  economic  growth  rates, and civil war. To  address  this  concern,  several  papers  seek to isolate exogenous variation in income.  In  sub-Saharan  Africa,  where  most  households  rely  on  rain-fed  agriculture,  falling  rainfall  and  drought  cause  large  reductions  in  income.  Miguel,  Shanker  Satyanath  and  Sergenti (2004) use annual rainfall growth as  an instrument for income growth. The   econd  s stage estimation equation is as follows, where  CWit is civil conflict prevalence (or onset in  some  specifications)  in  country  i  in  year  t,  git denotes  per  capita  income  growth,  Xit  is  a  vector  of  population,  geographic,  political  controls and social variables,  αi is a country  fixed  effect  (capturing  time  invariant  characteristics that relate to violence, growth, or  both), and δi year t denotes a country-specific  time trend: 25 They  use  annual  country  rainfall  growth  rates (current and lagged one year) as instrumental  variables  for  the  per  capita  income  growth terms in equation 3. There is a reasonably strong first stage relationship in the  sub-Saharan Africa sample, but it is weaker  in  other  world  regions,  where  much  less  economic  activity  relies  on  rain-fed  agriculture,  making  Africa  the  natural  region  for  the  application  of  this  approach.  In  the  IV  specification  they  find  that  a  5  percent  drop  in  income  growth  increases  the  likelihood of a civil conflict in the following year  by up to 10 percentage points, or nearly one  half.  Antonio  Ciccone  (2008)  reaches  the  same  conclusion  in  a  modified  specification  using log rainfall rather than rainfall growth  as  the  key  explanatory  variable.  This  main  effect is not substantially dampened in countries  with  stronger  democratic  institutions,  greater ethno–linguistic fractionalization, or  oil exporters.  This  analysis  highlights  the  role  that  income  shocks  play  in  generating  armed  conflict  in  Africa.  Unfortunately,  this  econometric  strategy  once  again  does  not  allow  the  authors  to  definitively  pin  down  a  unique  causal  mechanism:  rainfall  shocks  may  provoke  conflict  because  they  lower  the   pportunity cost of fighting among rural  o populations (those most affected by weather  shocks), or because crop failure also reduces  government  revenues  and  state  capacity,  or  both.32  Price shocks provide an alternative means  to  study  the  income–conflict  relationship.  Here  the  evidence  is  mixed.  For  instance,  Besley  and  Persson  (2008a)  exploit  international commodity price movements to investigate  civil  war  causes.  Consistent  with  the  predictions  of  their  theoretical  framework  (summarized above), rising import prices lead  to greater conflict, which they argue is due to  a drop in real wages. Export price increases  are  also  associated  with  increased  civil  war  prevalence,  since  growing  government  revenue  makes  seizing  the  state   ncreasingly i 31  For  a  discussion  of  this  theoretical  point,  see  Chassang and Padro-i-Miquel (2007). 32   There may also be other violations of the exclusion  restriction  unrelated  to  economic  factors,  for  instance  if  rainfall directly affects the costs of fighting. Moreover, the  authors  only  study  one  type  of  economic  shock,  mainly  affecting  the  rural  sector;  variation  in  national  income  induced  by  changes  in  industrial  production  or  foreign  aid could conceivably have different impacts. Future work  should also examine the possibility that droughts lead to  violence  between  settled  and  nomadic  groups,  a  salient  issue missed in the existing civil war data. (3)    ′ CWit = αi + Xit β + γ 0 git + γ 1 gi,t−1 + δi yeart + εit  . 26 Journal of Economic Literature, Vol. XLVIII (March 2010) attractive.33  However,  Samuel  Bazzi  and  Blattman (2010) reexamine the effect of trade  shocks  on  civil  war  using  an  expanded  and  more disaggregated database of international  commodity prices and   ountry trade shares.  c They suggest that previous results showing a  relationship between trade shocks and political  instability  (e.g.,  Brückner  and  Ciccone  2007; Angus S. Deaton and Ronald I. Miller  1995;  Besley  and  Persson  2008a,  forthcoming) are sensitive to the definition of conflict  and  to  specification.  Unlike  rainfall,  these  shocks show a less consistent relation to conflict,  whether  they  are  experienced  mainly  by  farmers  (i.e.,  agricultural  commodities),  the government (minerals and energy), or in  the aggregate. Nor do trade shocks robustly  predict  political  instability  in  Africa  when  interacted  with  governance  quality,  ethnic  fractionalization, or other common explanatory variables, casting doubt on the oft-cited  relationship between trade volatility and civil  conflict, and with it the causal effect of low  incomes  on  conflict.  This  question—why  massive trade and income shocks do not seem  to  systematically  destabilize  regimes—is  an  important topic of further research, demanding better data, theoretical specification, and  case studies.  More important than generating any single  result,  however,  these  papers  illustrate  the  33  Markus Brückner and Ciccone (2007) use terms of  trade shocks (driven by commodity price movements) as  an instrument for national income. They find a large effect  of adverse income shocks on conflict risk among undemocratic African countries. This finding differs from Miguel,  Satyanath, and Sergenti (2004), who do not find any statistically  significant  interactions  between  income  shocks  and political institutions. Commodity price shocks, while  exogenous, are again plausibly not a valid instrument for  income; these shocks could affect conflict via government  instability  (due  to  collapsing  revenues)  or  by  heightening  inequality.  In  this  case,  a  reduced  form  approach  is  less vulnerable to bias than the instrumental variable one  (Bazzi  and  Blattman  2010).  Political  instability  in  even  moderate-sized  commodity  producers  could  affect  the  world  price,  making  commodity  price  shocks  less  exogenous than rainfall. advantage  of  quasi-experimental  econometric approaches for distinguishing correlation  from causation. Indeed, future cross-country  empirical work should achieve more credible  causal  inference  by  focusing  on  a  single,  or  small  number  of,  exogenous  conflict  determinants and plausible instruments for them  rather  than  running  horse  races  between  many endogenous variables.  More detailed and theoretically motivated measurement.  Recent  developments  in  the  literature  on  natural  resources  and  conflict  illustrate  the  value  of  better  measurement.34  David  K.  Leonard  and  Straus  (2003) emphasize the importance of enclave  production, which has little connection to the  productivity  of  most  citizens  (and  therefore  may be less vulnerable to civil war violence).  More  accurate  data have  been  compiled on  oil  production  and  reserves  (Humphreys  2005), while others have done the same for  primary  and  secondary  diamond  deposits  (Elisabeth Gilmore et al. 2005), and mineral  rents  (Kirk  Hamilton  and  Michael  Clemens  1999). Ross (2006) finds that these new and  improved measures of underlying hydrocarbon and diamond deposits are strongly associated  with  more  civil  conflict  while  older  natural  resource  measures  (based  on  actual  production or exports) show less robust correlations. These findings are consistent with  the contest model’s prediction that insurgencies flourish in resource rich regions because  of  the  existence  of  more  rents  to  fight  over  and the availability of easy finance, which are  also  echoed  by  some  case  studies  (Philippe  Le Billon 2001, 2005; Ross 2004a).  There remains a need for better measures  of  political  grievances,  institutional  quality  and  even  poverty.  Consider  political  grievances first. Much has been made of the weak  cross-country  association  between  armed  conflict  and  grievance  proxies,  including  34  For a review  of the literature, see Michael L. Ross  (2004b, 2006) and Humphreys (2005). Blattman and Miguel: Civil War economic  inequality  and  ethnic  fractionalization  (e.g.,  Hegre  and  Sambanis  2006;  Laitin  2007).  This  weak  association  is  surprising given the robust negative relationship  between  economic  performance  and  some  social  divisions,  as  well  as  popular  perceptions  of  their  centrality  in  driving  conflict  (Alesina  and  La  Ferrara  2005;  Alesina  and  Roberto  Perotti  1996;  Easterly  and  Levine  1997). However, if risk factors like inequality  and ethnic fragmentation are measured with  considerable error, or if their relationship to  conflict  is  conditional  on  particular  institutional or historical contexts, then we should  not  be  surprised  that  their  statistical  association  with conflict is weak. A similar case  could be made about the existing and generally crude measures of state capacity. A  more  fundamental  concern  is  that  the  existing  proxies  are  theoretically  inappropriate.  National  income  per  capita,  for  instance,  may  not  capture  the  relevant  aspects  of  poverty  that  drive  fighting,  such  as the   roportion of rural male youth living  p close to subsistence income. Most measures  of  ethnic  and  religious  divisions  are  used  principally because they are straightforward  to  calculate,  rather  than  because  they  are  theoretically  convincing.  Indices  of  ethnic  fractionalization  have  been  questioned  as  a  meaningful  proxy  for  ethnic  tensions  (e.g.,  Daniel  N.  Posner  2004a,  2004b).  Here  we  have  again  seen  some  progress  in  measurement. Esteban and Ray (1994, 1999) propose  that  a  bimodal  distribution  of  preferences  or  resources—“polarization”—is  linked  to  greater  conflict  risk.  Jose  G.  Montalvo  and  Marta  Reynal-Querol  (2005)  create  an  empirical  measure  of  polarization  and  find  support  for  Esteban  and  Ray’s  theory:  while fractionalization is not correlated with  civil  conflict,  polarization  predicts  civil  war  i  ncidence. More recently, measures of ethnic  dominance—effectively indicators of minority  ethnic  rule—have  been  explored;  LarsErik  Cederman  and  Luc  Girardin  (2007)  27 find  that  minority    thnic  rule  is  associated  e with  increased  risk  of  war,  although  once  again this result may not be robust (Fearon,  Kimuli Kasara, and Laitin 2007).  Another  area  of  measurement  concern  is  income  inequality.  Some  case  studies  suggest  that  ‘horizontal’  inequality—inequality  that coincides with ethnic or other politically  salient  cleavages—is  a  particularly  important driver of civil conflict (Sambanis 2005;  Frances  Stewart  2001).  Yet  more  work  is  necessary  to  code  these  inequalities,  as  the  existing data remains fragmented and its sensitivity unexplored (Marie L. Besancon 2005;  Gurr and Will H. Moore 1997; Gudrun Østby  2005). Even with better measures, it remains  difficult  to  say  whether  it  is  the  extent  of  inequality or its context (factors such as state  strength or the ideological climate) that matter most (Cramer 2003, 2007). The  finding  that  many  civil  conflicts  are  fought  partially  along  ethnic  lines  alone  is  insufficient  to  make  the  case  that  e   thnic-based grievances are driving the fighting. An alternative explanation, for example,  is  that  the  costs  of  organizing  a  rebellion  (and  collective  action  more  generally)  are  simply lower within ethnically homogeneous  groups. Heightened ethnic tension during a  civil war might then be a result of the fighting rather than its cause. Both the cross-country and case evidence  highlight  the  susceptibility  of  states  with  weak institutions to civil war. In particular,  partly  democratic  societies  (called  anocracies  in  political  science)  have  emerged  as  prime  incubators  of  civil  conflict.  By  this  argument,  violent  collective  action  occurs  because dissidents are free enough to organize but nonviolent political activism is typically  ineffective  (Fearon  and  Laitin  2003;  Hegre et al. 2001). Yet  recent  work  suggests  such  findings  must  be  taken  with  caution.  For  instance,  democracy  and  anocracy  measures,  commonly  based  upon  the  Polity  IV  dataset  28 Journal of Economic Literature, Vol. XLVIII (March 2010) (Monty G. Marshall and Keith Jaggers 2006),  explicitly use civil war and political violence  in the coding of the data, thus mechanically  correlating democracy and conflict by definition (James Raymond Vreeland 2008). These  findings  highlight  the  need  for  better  measures of state institutions and less reliance on  existing  data.  The  importance  of  goverence  persists,  however,  even  after  accounting  for  the endogenous coding of the Polity IV data.  Goldstone et al. (2010) use conflict forecasting  to  show  that  regime  type  is  among  the  most  robust  predictors  of  civil  war  onset:  regimes  with  restricted  competition  and  some  repression  of  political  participation  (anocracies)  exhibit  the  highest  relative  risk  of war, especially those regimes classified as  partly democratic but factional (in that there  are polarized competing blocs). Their results  find robust support in the case literature (e.g.,  Sawyer 2004, 2005). While predictive rather  than  explanatory,  such  exercises  emphasize  the  importance  of  investigating  the  institutions–conflict link further. Reviewing  the  case  literature,  Sambanis  (2005)  suggests  several  possibilities  awaiting  empirical  exploration:  considering  new  versus  established  democracies  separately;  the  mass  popular  inclusiveness  of  political  institutions; the geographic concentration of  power; and the degree of state control over a  country’s geographic periphery. Leonard and  Straus (2003) also emphasize the importance  of direct taxation and institutions of personal  rule.35  Several  of  these  institutional  characteristics have yet to be carefully defined and  measured; where they exist, moreover, they  have not been tested against the alternatives. Finally,  while  a  degree  of  measurement  error  in  both  dependent  and  independent  variables  is  an  unavoidable  hazard  of  35  In the former case, Leonard and Straus attempt to  develop a measure of state strength for Africa using direct  taxes relative to national income in the early independence  period. Such worthwhile efforts should be extended. c   ross-country  work,  few  of  the  papers  we  reviewed  weigh  its  consequences  on  their  estimates.  The  implications  of  measurement  error  ought  to  be  discussed  with  the  same  attention  as  endogeneity  concerns.  Fortunately,  instrumental  variables  estimation  addresses  attenuation  bias  due  to  classical  measurement  error,  and  this  is  one  promising way forward. Integration with case studies. Historicalpolitical  analysis  is  the  most  time-honored  approach  to  the  study  of  civil  conflict.  New  efforts to integrate case analysis with crosscountry statistical work look to build on the  strengths  and  minimize  the  weaknesses  of  both approaches.  The clearest example comes from the study  of peacekeeping interventions. Ironically, the  study of peace has given us some of the best  evidence  we  have  for  the  rationalist  roots  of  war.  Michael  W.  Doyle  and  Sambanis  (2000, 2006) review the evidence on United  Nations peacekeeping missions and find that  they are associated with a higher  ikelihood  l of peace two years after the end of the war.  Virginia  Page  Fortna  (2004a,  2008)  examines  the  duration  of  peace  with  and  without  peacekeepers  and  reaches  a  similar  conclusion.  Both  recognize  the  limitations  of  econometric  analysis  when  missions  are  selective  and  heterogeneous.  Fortna  shows,  however, how nearly all observable determinants of peacekeeping interventions point to  the  U.N.  selecting  the  hardest,  rather  than  easiest, cases and thus if anything her analysis  may  be  underestimating  peace-building  effectiveness. More  revealing,  however,  is  the  insight  their  cases  bring  to  theories  of  conflict.  Doyle  and  Sambanis,  and  Fortna,  conclude  that  interventions  are  effective  because  peacekeepers (i) change the economic incentives of the armed groups away from warfare;  (ii) monitor and enforce compliance with the  peace agreement; and (iii) facilitate communication between sides, reducing information  Blattman and Miguel: Civil War asymmetries. Agreeing to a foreign intervention, furthermore, is a means for both sides  to  credibly  signal  a  commitment  to  peace.  If  keeping  the  peace  requires  that  external  actors  resolve  information  asymmetries  and  commitment  problems,  it  seems  likely  that  their absence contributed to war in the first  place.  The  evidence  is  far  from  conclusive,  but  unlike  most  cross-country  regressions,  these case-based studies specifically grapple  with rationalist theories of war. Multi-country  case  studies  are  also  generating  new  hypotheses  and  illuminating  some  of  the  causal  dynamics  driving  civil  conflict  (Cynthia  J.  Arnson  and  I.  William  Zartman  2005;  e.g.,  Collier  and  Sambanis  2005a,  2005b;  Fearon  and  Laitin  2005;  Walter and Jack Snyder 1999). Generalizable  or  not,  a  single  case  can  illustrate  possible  causal  mechanisms,  generate  new  hypotheses  for  testing,  and  stimulate  innovative  data    ollection.  While  this  case  literature  c is  diverse  and  impossible  to  summarize  in  full,  a  number  of  influential  patterns  and  mechanisms  stand  out,  including:  the  conflict-provoking  effects  of  commodity  price  shocks  on  fragile  economies  (a  claim  with  only  mixed  cross-country  empirical  backing);  the  central  role  of  external  financing  to  sustain  insurgencies  (including  providing  cross-border territory for camps, markets for  extracted  resources,  and  military  aid);  the  pervasiveness of earlier state repression; persistent  ethnic  or  elite  class  dominance;  and  the emergence of insurgencies in peripheral  regions where central government control is  weak.36 36  For  instance,  Annalisa  Zinn  (2005)  studies  the  Nigerian case, where many factors contributed to civil war  risk but there was no full-blown conflict in the 1980s and  1990s. The federal structure of Nigeria may have helped  diffuse ethnic rivalry at the center. This argument echoes  that of Horowitz (1985) who, in his seminal contribution  to  the  study  of  ethnic  conflict,  argues  for  federalism  as  an  institutional  reform  that  changes  the  locus  of  political conflict from the center to an increasingly large set of  smaller conflicts in different federal states. 29 Beyond borders.  Another  promising  direction  is  investigating  civil  conflict  causes  beyond  the  nation-state.  One  of  the  more  novel  approaches  is  taken  by  Andreas  Wimmer  and  Brian  Min  (2006),  who  use  fixed  geographic  territories  as  the  unit  of  analysis (rather than the more recent nationstate) over two centuries.  They suggest that  the  likelihood  of  civil  and  interstate  wars  has  been  highest  during  the  two  massive  institutional  transformations  that  shaped  the  modern  world:  the  nineteenth  century  incorporation  of  most  of  Africa  and  Asia  into  European  empires,  and  mid-twentieth  century  formation  of  nation-states  in  those  regions.  Many  wars,  they  argue,  have  been  fought to determine states’ governing structures, and so are most likely to occur when  these institutional principles are in flux due  to external geopolitical forces.37 More  commonly,  researchers  looking  beyond borders explore spillovers (or “contagion”) from neighboring countries. Hegre and  Sambanis (2006) find that war in a geographically contiguous country is a robust predictor  of  armed  civil  conflict.  Kristian  Skrede  Gleditsch  (2007)  finds  that  the  presence  of  trans-boundary ethnic groups increases conflict risk, while having stronger democracies  in  the  region  and  more  interregional  trade  are both associated with less civil war. Idean  Salehyan  and  Gleditsch  (2006)  provide  evidence  for  another  potential  source  of  conflict  contagion:  refugees.  Refugee  flows  can  ease  arms  smuggling,  expand  rebel  social  networks,  and  provide  a  new  pool  of  rebel  recruits.  Looking  beyond  borders  may  also  change our perspective on the role of ethnic  “grievances.”  Diasporas,  whether  in  neighboring countries or farther afield, driven by  37  Note  that  Alesina,  Easterly,  and  Janina  Matuszeski  (2006) find that artificial states created largely during the  nineteenth century wave of European colonization are no  more likely to experience civil or interstate warfare than  other countries. 30 Journal of Economic Literature, Vol. XLVIII (March 2010) ethnic  or  religious  sentiments  often  play  a  major role in rebel finance. The empirical salience of these and other  international issues in driving domestic civil  conflicts  (including  the  role  of  foreign  aid,  Cold  War  interventions,  and  cross-border  raids)  highlights  an  important  limitation  of  the existing theoretical work on armed conflict causes, namely its almost exclusive focus  on  the  internal  armed  groups’  decision  of  whether or not to fight. This is an important  direction for future formal theoretical work,  and  will  likely  draw  heavily  on  the  existing  international relations literature. Conflict duration and termination. Researchers  have  also  studied  war  duration and termination.38 For instance, Fearon  (2004), proceeds inductively, sorting cases by  length  and  looking  for  salient  patterns.  He  finds  that  short  wars  are  disproportionately  initiated by coups and popular revolutions, or  arose from the breakup of the former Soviet  Union and anticolonial wars, all of which seek  political  control  of  the  central  government.  Meanwhile,  autonomy-seeking  peripheral  region  insurgencies  and  “sons-of-the-soil”  movements  (fought  by  the  local  majority  against in-migrants) tend to last much longer. Researchers commonly use a proportional  hazard  model  to  analyze  conflict  duration,  employing  a  variety  of  economic  and  social  variables  to  assess  the  role  of  greed,  grievance  and  other  factors  in  the  length  of  civil  wars  (e.g.,  Collier,  Hoeffler,  and  Mans  Soderbom  2004).  Others  have  introduced  more  sophisticated  methods,  including  competing  risk  models  (Karl  R.  de  Rouen  and David Sobek 2004). One finding is that  e   thnically  fragmented  and  polarized  countries  experience  longer  conflicts  (Sambanis  and  Ibrahim  A.  Elbadawi  2000;  ReynalQuerol  and  Montalvo  2007).  David  E.  Cunningham  (2006)  finds  that  conflicts  are  38  Roy  Licklider  (1993)  provides  an  influential  early  collection of case studies. longer where multiple groups (“veto players”)  must  approve  a  settlement  because  there  are  fewer  mutually  acceptable  agreements,  information  asymmetries  are  more  acute,  and  shifting  alliances  create  incentives  to  hold out, complicating negotiations. These  duration  analyses  have  been  useful  but  suffer  from  many  of  the  same  challenges  as  the  onset  and  incidence  literature:  divergent  results  using  different  datasets;  endogenous explanatory variables; and heroic  interpretations  of  proxy variables.  Nonlinear  hazard  models  also  come  with  additional  identification assumptions, and thus are sensitive to measurement error, repeated and contemporaneous conflict events, and the unit of  time used (Gates and Håvard Strand 2004). A typology of conflict.  Researchers  have  analyzed civil war as a single phenomenon by  assumption,  leading  some  political  scientists  to  ask  whether  the  heterogeneity  in  types  of  civil war should be explicitly incorporated into  empirical models. Are the 1967 Biafran separatist conflict in Nigeria, Nepal’s Maoist insurgency,  and  the  long-running  insurgency  in  Colombia all examples of the same phenomenon, or should we study them separately? In  response,  several  papers  have  begun  to  explore  new  civil  war  “typologies.”  Some  have  segregated  wars  by  scale,  distinguishing between “conflicts” of 25 to 1,000 battle  deaths  per  year,  versus  “wars”  of  more  than  1,000  battle  deaths  (Gleditsch,  et  al.  2002).  Others, like Sambanis (2001), explore whether  “identity” (i.e., ethnic and religious) wars have  different  causes  than  ”nonidentity”  wars.  Kalyvas  (2005,  2007)  and  Laia  Balcells  and  Kalyvas (2007) suggest an alternative typology  based on war origins and conduct, identifying  four main classes: “conventional wars” (featuring  regular  armies  and  defined  front  lines);  “symmetric nonconventional wars” with regular  armies  fighting  peripheral  or  rural  insurgencies;  “symmetric  irregular  wars,”  fought  between  weak  national  armies  and  insurgents; and the least common, “urban wars.” Blattman and Miguel: Civil War 31 3.1.2  Further Challenges and Paths Ahead for Cross-Country Empirical Work Such subclassifications are difficult to test  statistically,  as  they  may  only  increase  the  volatility  and  sensitivity  of  empirical  results  (especially  because  it  subdivides  an  already  uncommon event into smaller subcategories  where there may not be statistical power to  demonstrate  the  validity  of  a  typology).  To  the extent that rare events limit the statistical power of such analysis, typology research  will need to lead with theory or case studies  rather than regression analysis. A  further  concern  is  that  a  generally  accepted approach (and theoretical justification)  for  subclassification  will  prove  elusive;  the  type  of  civil  conflict  that  occurs—for  instance, a center-seeking versus autonomyseeking civil conflict—is endogenous to state  repressive  capacity,  rebel  organizational  competence, underlying political grievances,  and  the  likelihood  of  military success  using  that strategy relative to others. Cramer  (2007)  challenges  civil  war  scholars  further,  asking  why  civil  wars  are  a   nalyzed  as  phenomena  distinct  from  other  forms of political violence—communal riots,  state  massacres,  and  coups  d’état.  Neither  the  theoretical  nor  empirical  case  has  been  settled  for  how  to  most  usefully  classify  political  violence  into  different  categories.  Moreover, the lines between wars, conflicts,  coups and communal violence are sometimes  ambiguous,  potentially  leading  to  errors  of  measurement.  Exploring  these  categorical  assumptions is an interesting area for future  analysis,  one  that  could  soon  be  more  convincingly  tackled  with  new  data  on  nonstate  armed  conflicts  and  “one-sided”  state  violence  (Kristine  Eck  and  Lisa  Hultman  2007; Human Security Report Project 2008;  UCDP 2008).39 Despite  the  empirical  difficulties,  we  do  not  believe  that  the  cross-country  regression  should  be  abandoned  entirely.  But  the  path  forward  looks  different  than  the  one  already  traveled.  Existing  empirical  models  are too rarely rooted in formal economic theories of conflict, regression functional forms  are  too  often  ad  hoc,  the  selection  of  proxies  is  driven  by  the  variables  easily  at  hand  (or  online),  and  their  inclusion  justified  by  informal arguments. As noted above, there is  good reason to believe that the relationships  between  civil  conflict  and  income  shocks,  ethnic  diversity  and  political  grievances  should be conditional ones, evident primarily  when  interacted  with  other  contextual  variables, and the theorizing and testing of these  potential interactions is a logical next step for  cross-country research. As  this  literature  continues  to  advance,  there are a handful of best practices to maintain.  First,  relentless  robustness  and  specification checking. Second, a focus on causal  identification via the use of a single or small  number of exogenous instrumental variables.  Third, the generation of new data on conflict  risk  factors  and  triggers,  including  better  measures  of  political  grievance  and  poverty  among  key  population  subgroups,  and  various  dimensions  of  state  institutions  and  capacity.  Fourth,  where  measurement  error  persists, explicit attention to its ramifications. Although  deriving  policy  implications  is  not  the  main  goal  of  this  survey,  there  are  some  implications  of  this  literature  worth  speculating  about.  The  empirical  relationship  between  violence  and  low  and  falling  39     The  Uppsala  Conflict  Data  Program  (UCDP)  defines  non-state  armed  conflict  as  the  use  of  armed  force  between  two  organized  groups,  neither  of  which  is  the  government  of  a  state,  which  results  in  at  least  twenty-five  battle-related  deaths  in  a  year.  They  define  one-sided  violence  as  the  use  of  armed  force  by  the  government  or  by  a  formally  organized  group against civilians which results in at least twentyfive  deaths  in  a  year,  excluding  extrajudicial  killings  (UCDP 2008).    32 Journal of Economic Literature, Vol. XLVIII (March 2010) 3.2  Micro-Level Empirical Evidence on the Causes of Civil War incomes found in the cross-country literature    suggests  that  implementing  insurance  schemes  to  protect  poor  societies  from  negative  income  shocks  could  be  fruitful  in  reducing the risk of civil conflict. A number  of  authors  have  recently  proposed  reforms  to  the  design  of  foreign  aid  and  to  national  agricultural policies to help blunt aggregate  income  shocks  and  thus  help  avoid  future  rounds  of  bloodshed  (Collier  and  Hoeffler  2002).  One  possibility  is  expanded  regional  drought  insurance  for  farmers.  A  variant  is  foreign  aid  contingent  on  objective  conflict  risk  indicators  (e.g.,  weather)—what  Miguel  (2007)  calls  “rapid  conflict  prevention  support”—to  bolster  local  economic  conditions  when the risk of political violence is high.40 This example illustrates the potential value  research could have in informing policies to  prevent  civil  war.  Yet  while  we  observe  a  poverty–conflict  link  in  the  data,  too  little  is  known  about  the  precise  identity  of  the  actual  perpetrators  and  organizers  of  violence, so the question of  which poor to target  with  assistance  to  head  off  violence  has  yet to be decisively answered. It also remains  an open question whether interventions that  change incentives for government and rebel  leaders  would  be  more  cost-effective  than  efforts to target the pocketbooks of potential  rebel  recruits.  A  clearer  understanding  of  rebel recruitment and organization is necessary for such assessments. These issues (and  others) are beginning to be addressed in the  emerging  applied  microeconomic  research  on civil war. Individuals are the natural unit of analysis  for  understanding  how  armed  groups  mobilize  civilians  to  fight  and  contribute  resources  to  their  cause.  The  black  box  assumptions  made  in  theoretical  models  on  group  cohesion  and  origins  need  better  justification.  In  response,  the  issue  of  collective  action  is  the  subject  of  a  growing  empirical literature.  The largest body of evidence comes from  case  studies  of  twentieth  century  rebellions. Several offer evidence consistent with  models  of  self-interested  actors  seeking  to  maximize  material  payoffs.  For  example,  Mark  Irving  Lichbach  (1994;  1995)  illustrates  how  successful  social  movements  offer selective material incentives to joiners.  Samuel  L.  Popkin  (1979;  1988)  finds  that  political  entrepreneurs  developed  mechanisms  to  directly  reward  peasant  rebellion  in  Vietnam.  Weinstein  (2007)  illustrates  40  Targeting this aid toward the social groups most likely  to  participate  in  armed  violence—for  example,  by  funding temporary job creation for unemployed young men, or  crop insurance for farmers, increasing the opportunity cost  of fighting in lean years—and in bolstering state capacity  might be most effective in preventing armed civil conflicts  from occurring in war prone countries, most importantly  in  sub-Saharan  Africa.  Several  African  countries,  most  notably Botswana, have already successfully implemented  similar  national  drought   nsurance  programs  including  i public works employment, and these could serve as models  (Theodore  R.  Valentine  1993);  Mick  Moore  and  Vishal  Jadhav  (2006)  discuss  a  related  large-scale  rural  public  works  employment  program  successfully  implemented  in Maharashtra, India. Burke et al. (2009) argue that climate change may increase civil war risk in Africa by over  50 percent to 2030 and that this would make the need for  insurance against weather shocks even more pressing. See  Cullen  S.  Hendrix  and  Sarah  M.  Glaser  (2007),  Michael  Kevane and Leslie Gray (2008), and David B. Lobell et al.  (2008) for a range of perspectives on the issue of weather,  climate change and conflict in sub-Saharan Africa. The analysis of household and regional data  is a growing, and perhaps the most promising,  new  direction  of  empirical  research.  Three questions have been of greatest interest so far: (i) the roots of individual participation in armed groups; (ii) the role of internal  geography  in  influencing  where  and  when  civil conflicts are fought; and (iii) the organization and conduct of conflict.  3.2.1  The Decision to Rebel Blattman and Miguel: Civil War how  in  Mozambique,  Sierra  Leone,  and  Peru  rebel  fighters  were  remunerated  via  looting  of  civilian  property  and  drug  sales.  Material  incentives  may  also  be  non-pecuniary.  Where  violence  against  civilians  is  commonplace,  joining  an  armed  group  has  in  many  cases  been  a  path  to  relative  safety (Jeffrey Goodwin 2006; Kalyvas and  Matthew  Kocher  2007;  Lichbach  1995;  T.  David Mason and Dale A. Krane 1989). The  prestige  associated  with  martial  success  may also be valued in and of itself. Yet echoing our discussion above, material  incentives are not always a factor in the individual decision to fight, leading some scholars  to  instead  argue  that  moral,  ideological,  or  ethnic grievances mainly facilitate collective  action. Scott (1976) and Wood (2003b) argue  that moral outrage led people to rebel against  deprivation  during  economic  modernization in Southeast Asia, and over government  abuses in El Salvador, respectively. In neither  case were selective   aterial  ncentives apparm i ent.41  Another  literature  documents  how  ethnic  and  social  identities  have  been  used  to identify, reward, and sanction free-riders,  thereby  providing  selective  social  incentives  to  participate  (Moore  1993;  Elinor  Ostrom  1990; Petersen 2001; Weinstein 2007). A  small  but  growing  number  of  recent  papers  employ  within-country  regional  data  to explore the factors that predict violence and  rebellion,  and  most  find  strong  associations  with local economic conditions. In Indonesia,  Patrick  Barron,  Kai  Kaiser  and  Menno  Pradhan  (2004)  find  positive  correlations  between  village-level  communal  violence  41  Some recent work on terrorism reaches similar conclusions.  Alan  B.  Krueger  and  Jitka  Maleckova  (2003)  claim terrorists’ primary motive is passionate support for  their  cause  and  feelings  of  indignity  or  frustration,  and  that poverty and education play a secondary role. Bueno  de Mesquita’s (2005) formal model allows terrorist organization leaders to sort recruits by quality, possibly leading  to  the  positive selection  of  terrorists documented  by  Krueger and Maleckova. 33 and  local  unemployment,  economic  inequality and natural disasters. Using data gathered  from  newspaper  reports,  Daniel  L.  Chen  (2007) finds that areas of high baseline religiosity experienced more social violence in the  aftermath of the Indonesian financial crisis. In  Nepal, S. Mansoob Murshed and Gates (2005)  find a strong correlation between district-level  civil  war  deaths  and  low  living  standards.  Using the same conflict outcome measure in  seventy-five Nepalese districts, Quy-Toan Do  and  Lakshmi  Iyer  (2007)  find  that  conflict  intensity  is  strongly  and  positively  related  to  the  presence  of  mountainous  and  forested  terrain,  as  well  as  higher  local  poverty  and  lower literacy rates, but is only weakly related  to caste diversity. Karen Macours (2008) uses  different data to argue for another dimension  to  Nepalese  recruitment:  Maoist  insurgents  appear to have targeted the districts with the  f   astest recent growth in income inequality for  recruitment.42 These  studies  are  informative  and  pioneering  but  many  suffer  from  challenges  of  data  quality  and  endogeneity  (limitations  the authors are sometimes the first to note).  Further data selection bias worries are introduced when conflict data are assembled from  Western,  English-language  news  reports.  Moreover,  individual  motivations  and  decisions are difficult to infer from district-level  aggregate  data;  just  as  in  the  cross-country  literature,  there  is  too  often  a  tendency  to  make  deep  behavioral  claims  from  simple  cross-sectional  correlations.  The  location  of  fighting  might  also  reflect  armed  groups’  strategic  considerations  (i.e.,  the  location  of  important  government  military  targets)  42 One  of  the  drawbacks  to  reviewing  a  burgeoning  literature is that it is sometimes difficult for the outsider  (and  reviewer)  to  readily  reconcile  contrasting  results  from  different  dataset  and  papers  on  the  same  country.  The variety of recruitment and violence patterns found in  Nepal alone is testament to this fact, and we look forward  to more cross-dataset comparisons and weighing of alternative hypotheses for Nepal, as well as other conflicts. 34 Journal of Economic Literature, Vol. XLVIII (March 2010) rather  than  the  underlying  socioeconomic  conditions  in  those  areas.  Finally,  there  remains  the  possibility  of  reverse  causality;  for example, in a single cross-section, conflict  could contribute to poverty directly, as well  as  be  driven  by  poverty  itself.  Even  panel  data is not immune to these concerns, due to  the economic changes driven by anticipated  future  conflict  or  other  omitted  variables.  Nevertheless,  the  subnational  approach  is  a  useful step forward. A  recent  study  by  Oeindrila  Dube  and  Juan  F.  Vargas  (2008)  overcomes  some  of  these  concerns,  employing  exogenous  price  shocks  and  detailed  panel  data  on  civil  violence—guerilla  and  paramilitary  attacks,  clashes with government military, and civilian  casualties—across  over  one  thousand  Colombian  municipalities.  Consistent  with  their  theoretical  model  (which  builds  on  Dal  Bó  and  Dal  Bó  2004),  they  find  that  an  increase  in  the  international  price  of  Colombia’s  leading  labor-intensive  export  commodity,  coffee,  significantly  reduces  violence  in  coffee-producing  regions,  while  an  increase  in  the  international  price  of  an  important  capital-intensive  export  good,  petroleum, increases violence in regions with  oil  reserves  and  pipelines.  In  an  important  validation  of  their  theoretical  model,  they  then  use  rural  household  surveys  to  show  that  the  positive  coffee  shock  affects  labor  market  outcomes  in  the  hypothesized  way,  boosting rural incomes and thus presumably  raising the opportunity cost of participating  in  rebellion.  A  limitation  of  the  study  is  its  lack of data on actual individual recruitment  into rebel groups or paramilitaries. To  the  extent  the  patterns  observed  in  Indonesia,  Nepal  and  especially  Colombia  are  causal,  the  most  likely  interpretation  is  that  higher  individual  opportunity  costs  lower  the  probability  of  participation in armed groups. We are hopeful that  increased  use  of  innovative  micro  datasets  will yield a more complete view of the pov- erty–conflict  relationship  and  clarify  the    exact   echanisms.43 For instance, it remains  m unclear empirically whether it is usually the  poorest  who  actually  fight  in  rebel  groups,  and  none  of  these  studies  tells  us  by  what  means  collective  action  problems  are  overcome in forming and running armed groups. A  handful  of  individual-  and  householdlevel  studies  are  beginning  to  answer  these  central questions. Working in post-genocide  Rwanda, Philip Verwimp (2003, 2005) built  a panel dataset based on a pre-genocide agricultural  survey  sample.  He  finds  that  both  poor wage workers and land renters were disproportionately represented among genocide  perpetrators,  and  that  they  appear  to  have  been  motivated  by  interest  in  the  property  of  landlords  (who  were  disproportionately  victims),  suggesting  a  class-based  interpretation.44  In  Sierra  Leone,  Humphreys  and  Weinstein  (2008)  collect  post-war  data  on  combatants  and  noncombatants  from  the  same villages, and find that retrospective poverty measures (e.g., mud housing), low education, and rebel promises of material rewards  are robustly correlated with recruitment into  armed  groups.  However,  proxies  for  political  exclusion,  such  as  supporting  a  national  opposition  political  party,  did  not  predict  participation.  Unexpectedly,  they  also  find  that the empirical determinants of voluntary  and  forcible  recruitment  were  similar,  suggesting that rebel leaders might be employing selective rewards and punishments strategically.  Alternatively,  it  could  point  to  the  limitations  of  postwar  self-reported  data  on  the  rebel  participation  decision,  since  respondents  have  strong  incentives  to  lie  about  the  nature  of  their  recruitment  and  43  For  example,  Justino  (2009)  surveys  the  emerging  micro-level evidence and suggests that household poverty  interacts  with  vulnerability  (or  risk  of  exposure)  to  violence in complex ways. 44 Catherine  André  and  Jean-Philippe  Platteau  (1998) find related results. See also Straus (2006) on the  Rwandan Genocide. Blattman and Miguel: Civil War wartime behaviors (  laiming abduction even  c if they in fact volunteered to fight), to escape  social disapproval or even legal prosecution. Taken together, these studies suggest that  material incentives are influential in driving  killing even in the most brutal civil wars and  in  genocide—supposedly  the  quintessential  act  of  irrational  hatred.  Proxies  for  political  grievances  perform  far  more  poorly  at  predicting  individual  behavior  than  economic  factors in these cases. Existing data on political  grievances  are  admittedly  quite  coarse  and may not adequately account for context  specificity, but this provides evidence against  the view that political grievances are always  decisive  determinants  of  participation  in  armed groups. We again return to the need  for  detailed  micro-data—ideally,  individual  panel data collected comparably across countries—on  political  attitudes  and  grievances,  incomes  and  labor  market  opportunities,  as  well  as  local  government  budgets  and  security  capacity  in  order  to  more  conclusively  disentangle competing explanations for participation in civil conflict. The above examples also call attention to  the importance of measuring the incentives  offered  by  armed  organizations.  A  robust  assessment  of  competing  explanations  for  rebel  recruitment  would  require  data  on  the  individual  characteristics  of  rebel  participants  and  non-participants,  as  well  as  the  recruitment  “offers”  received  by  both  types  of  individuals,  both  offers  taken  and  those  refused.  These  data  will  obviously  be  extremely  challenging  to  collect,  especially  retrospective data given the high and selective  mortality  experienced  during  wartime,  and  will  likely  require  greater    oordination  c between  researchers,  governments  and  humanitarian aid donors. 3.2.2  Internal Geography Like  recruitment,  geographic  patterns  of  conflict within states are best explored using  sub-national  data.  To  this  end,  researchers  35 in organizations like the International Peace  Research  Institute  of  Oslo  (PRIO)  and  the  University  of  Uppsala  have  begun  to  construct and analyze sub-national conflict datasets. Early results are largely consistent with  the existing cross-country and case evidence  on  the  role  of  geography.  Halvard  Buhaug  and  Jan  Ketil  Rød  (2006),  for  instance,  disaggregate  conflict  and  geographic  country  data  into  100  kilometer  by  100  kilometer  grids  within  Africa,  and  find  that  separatist  conflicts are more likely to occur in sparsely  populated  regions  near  national  borders,  at  greater  distances  from  the  capital  (where  political control by the central government is  likely costlier), and in the vicinity of petroleum  fields, where the rents of political power for  secessionists  are  presumably  highest.45  The  existence  of  easily  lootable  resources  in  the  context  of  a  bitterly  poor  society  also  drove  violence in Sierra Leone’s war: there are significantly  more  armed  clashes  within  chiefdoms  containing  greater  diamond  wealth  (John  Bellows  and  Miguel  2009).  Joshua  D.  Angrist and Adriana D. Kugler (2008) similarly  find  that  an  increase  in  world  cocaine  prices led to increased civil conflict violence  in coca growing regions of Colombia relative  to other parts of the country. 3.2.3  The Organization and Conduct of Warfare Another direction is empirical research on  the fighting factions themselves. Theoretical  progress in this area accelerated some years  ago,  and  we  now  have  a  host  of  theories  of  45 A closely related approach examines the geographic  features of civil wars, such as the size of the conflict zone  or the distance from the capital. Buhaug and Gates (2002)  build a database of battle sites and find that wars of secession and wars with an ethnic or religious dimension tend  to  fought  in  the  peripheries.  Larger  conflict  zones  are  associated  with  border  zones,  the  presence  of  natural  resources,  and  peripheral  conflicts.  While  interesting,  it  remains  to  be  seen  what  such  associations  can  add  to  a  theoretical understanding of civil war. 36 Journal of Economic Literature, Vol. XLVIII (March 2010) rebel  and  terrorist  organization,  several  of  which  we  reviewed  above,  as  well  as  extensive case evidence.46 Systematic evidence on armed group organization  and  action,  however,  has  lagged  behind.  Economists  and  political  scientists  have  begun  to  conduct  surveys  of  excombatants  in  Burundi,  Colombia,  Liberia,  Sierra  Leone,  and  Uganda  (Jeannie  Annan  et  al.  2008;  Ana  M.  Arjona  and  Kalyvas  2008; Humphreys and Weinstein 2004; Eric  Mvukiyehe,  Cyrus  Samii,  and  Gwendolyn  Taylor  2008;  James  Pugel  2007),  some  still  works in progress. These surveys explore who  the combatants were, where they came from,  and  their  prewar  experiences.  Comparisons  across armed groups, or to civilians, suggest  motivations  for  joining  an  armed  group  or  committing particular acts of war. Such data have limitations, however: they  are  self-reported;  they  are  based  on  a  sample  of  survivors; and  they  can  seldom  move  beyond  descriptive  analysis  of  who  joins  and  why.  Isolating  exogenous  variation  in  recruitment, tactics, or exposure to violence  is  crucial  for  drawing  firm  conclusions.  For  instance, to understand the determinants of  civilian  abuse,  Humphreys  and  Weinstein  (2006)  construct  military  unit-level  measures  of  discipline  and  civilian  abusiveness  that are exogenous to the individual respondent. However, the sample size is such that,  unfortunately,  there  are  seldom  more  than  one or two observations per unit. Beber and  Blattman (2008) use new data on   ombatants,  c and  exogenous  constraints  on  rebel  recruitment,  to  understand  the  logic  of  coercive  child  recruitment  in  northern  Uganda.  Unpopular  and  short  of  funds,  the  rebel  Lord’s Resistance Army had just one means  of  gaining  recruits:  abduction,  followed  by  the  constant  threat  of  punishment  against  46    For  case  studies  on  African  guerrilla  movements,  see Christopher S. Clapham (1998) and Morten Bøås and  Kevin C. Dunn (2007). new  recruits.  The  likelihood  of  receiving  a  firearm and self-reported dependability was  increasing  in  age,  while  loyalty  and  length  of stay fall in age. From a rebel perspective,  the  intermediate  age  group—young  adolescents—were  the  most  attractive  recruits,  suggesting that coercion and child soldiering  go hand in hand. Deliberately  indiscriminate  violence  against  civilians  may  be  another  source  of  exogenous  variation.  Kalyvas  (2006)  documents  100  studies  and  45  historical  cases  where  state  violence  against  noncombatants  provoked  greater  insurgent  violence  as  a  response. In a recent micro-empirical study,  Jason  Lyall  (2009a)  examines  the  effect  of  Russia’s  purposefully  random  shelling  of  Chechen villages on insurgent activity. This  paper, one of the few to arguably study random violence, comes to the opposite conclusion:  insurgent  attacks  in  the  village  and  its  neighbors  decline  after  shelling.47  However,  he is reluctant to draw conclusions about how  violence in a particular place translates into  long-term outcomes there, and the generality  of this result is unclear.  Counterinsurgency is a topic of major current interest in the wake of the U.S.-led wars  in  Iraq  and  Afghanistan.  Military  analysts  and  commanders  have  written  extensively  on  theories  and  lessons  learned  in  the  field  (e.g.,  Richard  L.  Clutterbuck  1966;  David  Galula 1964; H. R. McMaster 2008; John A.  Nagl  2002;  David  H.  Petraeus  2006;  Kalev  I.  Sepp 2005).48  Researchers  have  begun to  investigate the efficacy of recent U.S. counterinsurgency  operations.  Berman,  Shapiro  and  Joseph  H.  Felter  (2008)  find  that  the  47  Lyall  (2009b)  compares  “sweep”  operations  by  Russian and pro-Russian Chechen forces during the war  in Chechnya (2000–2005). Co-ethnics appear to be better  at counterinsurgent operations: comparing sweeps in pairs  of  similar  settlements,  insurgent  attacks  increase  after  Russian sweeps but decline after Chechen operations. 48  Stephen Biddle et al. (2008) review military counterinsurgency research in political science. Blattman and Miguel: Civil War disbursement  of  small-scale  reconstruction  funds  by  U.S.  field  military  commanders  in  Iraq is correlated with lower levels of insurgent  attacks.  Of  course,  selection  on  unobserved  traits,  or  regression  to  the  mean,  could be driving this apparent effect; for this  reason, a number of experimental and quasiexperimental  evaluations  of  counter-insurgency spending are presently underway.49 Some recent work finds that armed groups  respond  strategically  to  new  information.  Radha Iyengar and Jonathan Monten (2008)  develop data on insurgent attacks and media  coverage  in  Iraq,  and  find  an  “emboldenment”  effect  of  new  information  about  U.S.  withdrawal  intentions  on  the  pace  of  insurgent attacks. They use this evidence to show  that insurgent organizations are sophisticated  strategic actors, but while doing so also illustrate  the  existence  of  asymmetric  information between the warring parties. This work  advances our understanding of the empirical  relevance  of  the  information  asymmetries  that are so prominent in theoretical work. 3.2.4  Next Steps There are four main limitations to this new  applied micro-empirical literature. First, the  necessary  datasets  are  expensive,  hard-won,  and often require a mix of luck and ingenuity.  Hence they are too few in number. Second,  sufficient  attention  has  often  not  been  paid  to  measurement  issues,  research  design,  and  econometric  identification.  Too  many  researchers  have  rushed  to  collect  microdata without adequately preparing a research  design  in  advance,  or  testing  the  assumptions required for causal inference. Third, it  remains to be seen whether and how microlevel  results  will  test  conflict  theories.  In  49 Of note is the U.S. Defense Department’s Minerva  Research  Initiative,  which  in  cooperation  with  a  consortium  of  university  researchers,  is  supporting  rigorous  impact  evaluations  of  development  and    military  programs to build peace in Iraq, Afghanistan, the Caucasus,  Philippines, and elsewhere (Princeton University 2009).  37 particular,  while  counter-insurgency  studies  have inherent military value, it is not always  clear  how  they  relate  to  broader  theoretical  debates.  Fourth,  it  remains  to  be  seen  how  micro-level  insights  from  one  war  generalize  to  other  contexts,  and  thus  can  be  useful for policymakers elsewhere. At this early  stage, this is primarily an argument in favor  of increasing the number of micro-empirical  studies on the causes and conduct of civil war. 4.  Economic Legacies of Civil Conflict People living in zones of war are maimed,  killed,  and  see  their  property  destroyed.  They  may  be  displaced,  or  prevented  from  attending school or earning a living. A growing empirical literature estimates the magnitude of these effects of war on later income,  p   overty,  wealth,  health,  and  education.50  Each  of  these  outcomes  has  implications  beyond the individual, however. To the extent  that  these  costs  are  borne  unequally  across  groups,  conflict  could  intensify  economic  inequality as well as poverty. The destruction  (and deferred accumulation) of both human  and  physical  capital  also  hinder  macroeconomic  performance,  combining  with  any  effects of war on institutions and technology  to impact national income growth.  Understanding  the  economic  legacies  of  conflict  is  also  important  to  the  design  of  postconflict  recovery.  If  war  itself  further  aggravates  factors  that  enhance  the  risk  of  civil conflict—poverty, inequality, and social  discord—then  it  could  partially  account  for  war reoccurrence. Indeed,  the  aggregate  effects  of  armed  conflict,  and  its  threat,  are  considerable.  Dani  Rodrik  (1999)  argues  that  outbreaks  of  social  conflict  are  a  primary  reason  why  50  Justino  (2007,  2009)  also  surveys  this  emerging  literature.  Many  of  the  datasets  and  working  papers  are  being shared via research groups such as the Households  in Conflict Network (http://www.hicn.org). 38 Journal of Economic Literature, Vol. XLVIII (March 2010) national  economic  growth  rates  lack  persistence  and  why  so  many  countries  have  experienced a growth collapse since the mid1970s.  A  number  of  cross-country  growth  studies  link  measures  of  political  instability  to large negative effects on national savings,  investment,  income  and  growth.51  Valerie  Cerra and Sweta Chaman Saxena (2008) find  that output declines six percent in the immediate  aftermath  of  a  civil  war.  Quantitative  case  evidence  supports  this  cross-country  relationship:  Alberto  Abadie  and  Javier  Gardeazabal  (2003)  find  that  terrorist  violence in the Basque region of Spain has significantly  reduced  economic  growth  there  relative to neighboring regions. The effect on  poverty can be dramatic. In Rwanda, 20 percent  of  the  population  moved  into  poverty  following the genocide (Justino and Verwimp  2006).  Civil  wars  may  also  have  negative  growth  spillovers  on  neighboring  countries  (James C. Murdoch and Sandler 2004). An  economic  growth  theory  framework  is  useful  for  analyzing  the  consequences  of  conflict. If conflict affects economic performance,  it  must  be  because  it  affects  a  factor  of  production  (physical  capital,  labor,  or  human capital), the technology, institutions,  and  culture  that  augment  these  factors,  or  prices  (e.g.,  costs  of  capital).  The  growth  framework  also  clarifies  the  possible  nature  of  the  impacts,  not  only  on  income  levels  and  economic  growth  in  equilibrium,  but  also out-of-equilibrium dynamics such as the  speed of convergence. The  framework  we  use  to  organize  our  discussion  is  based  on  neoclassical  models  of  growth  with  human  capital  (e.g.,  Robert E. Lucas 1988; N. Gregory Mankiw,  David  Romer,  and  David  N.  Weil  1992).  51  See  Robert  J.  Barro  (1991),  Alesina  et  al.  (1996),  Alesina  and  Perotti  (1996),  and  Svensson  (1998).  The  political  instability-growth  relationship  may  be  partly  endogenous but some argue that the association is likely to  persist even after better accounting for this bias (Kwabena  Gyimah-Brempong and Thomas L. Traynor 1999). Alternative frameworks, however, can generate  radically  different  predictions  regarding  the  likely  impact  of  violence—and,  in  particular,  the  destruction  of  capital—on  economic performance. To illustrate, a one-time  shock to capital has no effect on equilibrium  income  or  growth  in  a  neoclassical  model,  but persistent effects are possible in poverty  trap,  endogenous  growth,  and  vintage  capital  models (e.g.,  Costas  Azariadis  and Allan  Drazen 1990; Barro and Sala-i-Martin 2003;  Simon Gilchrist and John C. Williams 2004).  The relative degree of physical and human  capital  destruction  also  matters:  recovery  could  be  faster  under  highly  asymmetric  destruction—say,  extensive  physical  capital  destruction  when  human  capital  remains  largely intact—since the relative abundance  of  one  type  of  capital  raises  the  marginal  product  of  the  scarce  type,  spurring  on  investment.  Barro and Sala-i-Martin (2003,  p. 246) describe this “imbalance effect” in a  one-sector  endogenous  growth  model  with  physical and human capital, with the following production function: (4)    Y = AK α (Lh)1−α, where  A,  K ,  and  L  have  the  usual  interpretations  as  technology,  physical  capital,  and  workers,  respectively,  h  denotes  average worker human capital, and total human  capital  is  H =  Lh.  They  examine  the  case  where the K /H ratio deviates from its steady  state value of  α /(1 − α), for instance due to  war  damage;  capital  investments  are  irreversible;  and  there  are  adjustment  costs  to  c   apital  accumulation.  When  adjustments  costs  for  human  capital  accumulation  are  greater than for physical capital investment,  which seems  plausible  empirically,  the  disproportionate  loss  of  human  capital  in  war  results  in  slower  economic  growth  and  recovery  than  the  destruction  of  physical  capital, during the transition back to steady  state growth. Blattman and Miguel: Civil War Given  the  proliferation  of  plausible  theoretical  perspectives,  empirical  evidence  is  essential. Yet assessing the economic consequences of civil war is complicated by a central  identification  problem:  war-torn  countries  are different than peaceful ones (as detailed  in sections 2 and 3). Poor postwar economic  performance could reflect the declining economic conditions that contributed to armed  conflict in the first place, in addition to any  direct  impacts  of  war.  Similar  endogeneity  concerns  arise  in  assessing  impacts  on  government  performance  and  institutions,  and  even  individual-level  outcomes  (to  the  extent different types of individuals are targeted for violence or recruitment into armed  groups). The existing empirical literature on  postwar  economic  recovery  is  only  beginning to seriously address these issues, and as  a  result  the  conclusions  we  can  draw  about  the   onsequences of  war, and  the  appropric ate postwar policy responses, are more limited than in the case of civil conflict causes  discussed above. 4.1  Physical Capital and Investment Evidence  from  interstate  wars  suggests  that  the  postwar  evolution  of  physical  capital  often  behaves  as  predicted  by  the  neoclassical  model,  namely,  rapid  recovery  to  equilibrium  levels.  One  set  of  studies  examines  the  impact  of  U.S.  bombing  on  later  outcomes  at  the  city  or  regional  level. Although they generally lack detailed  information  on  local  physical  capital  levels,  in  Japan  (Donald  R.  Davis  and  David  E.  Weinstein  2002)  and  Germany  (Steven  Brakman,  Harry  Garretsen,  and  Marc  Schramm  2004)  in  World  War  II,  cities  that  were  heavily  bombed  quickly  recover  in  population  back  to  prewar  trends,  such  that 20 to 25 years postwar city populations  are  indistinguishable  from  cities  that  were  left untouched by bombing. In the Vietnam  War, which combined external intervention  and a civil war, Miguel and Gerald Roland  39 (2006) find similarly rapid local population  recovery from bombing. These  cross-region  results  echo  the  consensus  from  the  cross-country  literature  on  the rapid recovery of postwar economies (A.  F. K. Organski and Jacek Kugler 1977, 1980;  Adam  Przeworski  et  al.  2000).  Indeed,  a  recent study of the output response to alternative  crises—including  currency  crises,  bankingcrises, civil war, and sudden shifts in  executive power—finds that while civil wars  cause  the  steepest  short-run  fall  in  output  (six  percent  on  average),  only  in  the  case  of  civil war does output rebound quickly, recovering half of the fall within a few years, while  output drops are more persistent for financial  crises (Cerra and Saxena 2008). While such  event studies conceal a great deal of heterogeneity in experiences, and suffer from obvious  omitted  variable  bias  concerns,  none  of  these results appear consistent with poverty  trap  models  of  economic  growth  such  as  those recently advanced by Jeffrey D. Sachs  (2005). Nevertheless,  there  are  reasons  to  be  cautious  in  generalizing  these  experiences.  These  studies  cannot  rule  out  the  possibility  that  the  economic  devastation  caused  by  civil  war  prevent  some  countries  from  achieving durable peace. Countries with successful  postwar  economic  recovery  are  also  more  likely  to  collect  systematic  economic  data,  introducing  possible  selection  bias:  war-torn  countries  where  the  economy  and  institutions  have  collapsed  (e.g.,  Congo  and  Somalia)  lack  good  data,  while  those  that  recover  (Vietnam)  have  data.  This  could  bias  the  cross-country  estimates  of  war’s  economic impacts towards zero as the most  destructive wars exit the sample. Civil wars  are also often localized and fought with small  arms and munitions, so they do not necessarily  see the large-scale destruction of  capital  caused  by  bombing,  creating  some  separation between the evidence we have and the  contexts of greatest interest. 40 Journal of Economic Literature, Vol. XLVIII (March 2010) Yet  even  in  civil  conflicts  without  largescale  bombing,  capital  can  sometimes  be  depleted  in  devastating  ways.  First,  household  assets  may  be  stolen  or  destroyed.  Mozambicans,  for  instance,  are  thought  to  have  lost  80  percent  of  their  cattle  stock  during their civil war (Tilman Bruck 1996),  while  many  in  northern  Uganda  lost  all  of  their  cattle,  homes  and  assets  (Annan,  Blattman,  and  Roger  Horton  2006;  Robert  Gersony 1997); cattle and other farm assets  often  represent  most  of  a  rural  household’s  savings. As of yet, however, there is still limited  systematic  panel  data  on  the  implications of such asset loss on long-run household  welfare.  Second,  countries  at  war  are  likely  to see massive flight of mobile forms of capital, since foreign assets offer higher relative  returns  at  lower  risk  (Collier  1999;  Collier,  Hoeffler,  and  Catherine  Pattillo  2004).  The  same factors could lead to such low levels of  new investment that the existing capital stock  quickly deteriorates.52 The  neoclassical  growth  model  prediction  that  the  capital  stock  should  return  to  its  steady  state  level  once  the  fighting  stops—implying  relatively  high  returns  and  rates  of  investment  that  decline  as  the  equilibrium  is  approached—supposes  that  underlying  institutions  and  technology  are    largely  unaffected  by  the  fighting,  and  that  military  spending,  the  returns  to  capital  investment  and  the  cost  of  capital  similarly  return  to  prewar  levels.  Yet  any  political  or  economic uncertainty following war is likely  to decrease expected returns, increase relative  risk,  and  possibly  shorten  investment  52  Rising military spending can also crowd out government  infrastructure  projects  and  other  public  goods.  A  World Bank report estimates that average military spending  in  poor  countries  rises  from  2.8  percent  of  national  income in peace to 5 percent at war (Collier et al. 2003).  Cross-country evidence suggests that such military spending is growth-retarding due to the shift away from productive  investment  (Norman  Loayza,  Malcolm  Knight,  and  Delano Villanueva 1999). horizons, thus reducing investment and raising the cost of capital. Collier (1999) argues  that adverse effects on the cost of capital are  sometimes persistent empirically. Foreign  financial  aid  and  other  international interventions could play an important  role in rebuilding infrastructure and replenishing household assets in these cases. There  is  also  anecdotal  evidence  from  countries  like Sierra Leone and Liberia that the role of  the international community was decisive in  shifting expectations about future conflict risk  (Collier  2007).  Collier  and  Hoeffler  (2002)  suggest  that  increased  foreign  aid  is  likely  to  reduce  civil  conflict  risk,  and  find  some  modest  reductions  in  the  likelihood  of  conflict  for  aid  recipients,  working  through  the  channel  of  faster  economic  growth.  Yet  the  nonrandom placement of both civil conflicts  and  foreign  aid  means  we  cannot  necessarily interpret these statistical relationships as  causal. Joppe De Ree and Eleonora Nillesen  (2006), however, examine aid disbursements  and civil conflict risk in sub-Saharan Africa  using an instrumental variable strategy that  exploits exogenous changes in donors’ overall  foreign aid budgets, and they find that a 10  percent  increase  in  aid  to  an  African  country reduces conflict risk by 6 percent. Taken  together, these two studies suggest that postwar foreign aid may play a key role in solidifying the transition to peace.53  Future  advances  could  come  from  disaggregating  such  postwar  aid  flows  and  investigating the role of specific activities (such as  peacekeeping) on reducing risk and promoting economic recovery. Recently Collier, Lisa  Chauvet and Hegre (2008) attempt just such  a cost–benefit analysis of alternative aid and  military  interventions.  Such  calculations  are  53 An emerging literature examines the role that postwar  demilitarization  programs  (usually  funded  by  aid  donors) could play in securing the peace, although there  is little quantitative evidence on the effectiveness of these  programs. Blattman and Miguel: Civil War highly dependent on parameters for which we  currently have limited data (e.g., the growth  effects  of  avoiding  a  civil  war,  the  selection  of countries into different interventions) and  thus have to be interpreted with caution. 4.2  Life, Labor, and Human Capital Wars kill and maim people, both directly  and  indirectly  through  famine  and  disease.  Conflict  victims  are  overwhelmingly  civilians, and indirect deaths are seen disproportionately  among  the  poor,  women,  children  and the elderly.54 The short-run impact of war is clearly disastrous, but there is mixed evidence on how long  the  economic  effects  on  human  capital  and  quality of life persist. In the study of Vietnam  bombing  mentioned  above,  local  living  standards and human capital levels also converged  rapidly  across  regions  after  the  war,  leaving  few visible economic legacies twenty-five years  later (Miguel and Roland 2006). This empirical finding echoes the cross-country literature  showing  rapid  post-war  economic  recovery  and argues against poverty trap type models.    An  innovation  is  the  attempt  to  address  the  endogeneity of bombing. Miguel and Roland  instrument  for  bombing  intensity  using  distance from the arbitrarily settled North-South  Vietnamese border (on the 17 th parallel north    latitude).55  A  limitation  of  this  paper—and  others  that  examine  differences  across  subnational  units  over  time—is  its  inability  to  credibly estimate the aggregate national economic impact of war damage; for that, crosscountry studies may be more convincing. A new and rapidly growing microeconomic  literature finds more persistent negative war  54 Wars  are  thought  to  have  directly  caused  269,000  deaths  and  8.44  million  disability-adjusted  life-years  (DALYs) in 1999 alone, with twice again this number of  deaths  and  DALYs  estimated  in  1999  due  to  the  lingering effects of wars between 1991 and 1997 (Hazem Adam  Ghobarah, Paul Huth, and Bruce Russett 2003, 2004). 55  Districts located near the border were subject to more  fighting, cross-border raids, artillery shelling, and bombing. 41 impacts  on  individual  human  capital,  especially  in  African  cases.  Using  panel  data  on  child  nutrition,  Harold  Alderman,  John  Hoddinott  and  Bill  Kinsey  (2006)  find  that  young  children  who  suffered  from  warrelated  malnutrition  in  Zimbabwe  are  significantly  shorter  as  adults,  which  may  affect  their  lifetime  labor  productivity.  In  a  related  paper,  Tom  Bundervoet,  Verwimp,  and  Richard  Akresh  (2009)  exploit  variation  in  the  timing  of  armed  clashes  in  the  Burundi  civil  war  to  estimate  impacts  on  child  nutrition,  and  find  that  children  who  lived  in  a  war-affected  region  have  sharply  lower  height-for-age  than  other  children,  with an average drop of roughly 0.5   tandard  s deviations.  Turning  to  a  Central  Asian  setting,  adolescent  Tajik  girls  whose  homes  were destroyed during that civil war are less  likely  to  obtain  secondary  education,  again  with  likely  adverse  effects  on  later  wages  and  life  chances  (Olga  Shemyakina  2006).  The validity of these studies, all of which use  difference-in-differences  methods,  relies  on  the assumption of similar underlying human  development trends in the war-affected and  peaceful  regions  of  these  countries,  something  that  is  challenging  to  convincingly  establish  with  the  limited  time  horizons  of  b most datasets.56 Moreover, as in the   ombing  studies,  these  studies  may  underestimate  war’s overall impacts to the extent that even  those  in  largely  peaceful  regions  were  also  adversely affected by civil war disruptions. Turning to combatants, it appears that the  interruption of human capital accumulation is  one of the most pervasive impacts of military  service. Studies of U.S. and European veterans of the Vietnam and Second World Wars  find  large  and  persistent  falls  in  earnings  56 An unexpected spillover effect of war on the human  capital of neighboring countries comes from Montalvo and  Reynal-Querol (2007) who, using civil wars as an instrumental variable, argue that for each 1,000 refugees there  are between 2,000 and 2,700 additional cases of malaria  in the refugee-receiving country. 42 Journal of Economic Literature, Vol. XLVIII (March 2010) and  higher  mortality  (Angrist  1990,  1998;  Angrist and Krueger 1994; Norman Hearst,  Thomas B. Newman, and Stephen B. Hulley  1986;  Guido  Imbens  and  Wilbert  van  der  Klaauw 1995). These patterns are echoed by  new evidence from developing countries. For  instance, Blattman and Annan (forthcoming)  and Annan et al. (2009) use exogenous variation in rebel recruitment methods—namely,  near-random  forced  recruitment  in  rural  Uganda—to  estimate  its  impact  on  adolescents and young adults. These conscripts are  more likely to have persistent injuries, accumulate  less  schooling  and  work  experience,  are less likely to be engaged in skilled work,  and  earn  lower  wages  as  adults  (especially  males).  Psychological  trauma  and  community  rejection,  meanwhile,  are  concentrated  in  the  small  minority  that  experienced  the  most violence.57 The conclusion that emerges  is  that  military  experience  is  a  poor  substitute for civilian education and labor market  experience. In settings where a large share of  youth actively participate in fighting, aggregate  economic  impacts  could  be  quantitatively important. This emerging applied microeconomic literature only scratches the surface of the range  of possible civil war impacts on the economy  and  society.  More  evidence  is  required  on  the  educational,  employment,  and  health  impacts  of  conflict  on  armed  group  participants and civilians, including internally displaced  people.  The  leading  question  is  not  whether wars harm human capital stocks, but  rather  in  what  ways,  how  much,  for  whom,  and  how  persistently—all  crucial  questions  for understanding war’s impacts on economic  growth and inequality, as well as priorities for  postconflict assistance. To our knowledge, no  57 A  somewhat  different  pattern  is  observed  by  Humphreys  and  Weinstein  (2006,  2007),  who  find  that  increases  in  Sierra  Leone  fighters’  exposure  to  violence  are correlated with lower postwar community acceptance,  but also find that violence has little correlation with labor  market success. rigorous  evidence  yet  exists  on  which  types  of  programs  are  most  effective  at  overcoming war’s adverse legacies on human capital.58 4.3  War, Institutions, and Society The  steady  state  to  which  a  postconflict  society returns is a function of the fundamental determinants of growth: technology, institutions,  and  social  organization.  The  rapid  return to prewar levels of labor and capital in  Germany,  Japan,  and  Vietnam  noted  above  suggests  that  these  determinants  were  not  diminished by war (or, if they were, they likewise recuperated quickly). Unfortunately,  we  have  little  systematic  quantitative  data  with  which  to  rigorously  judge claims about the evolution of institutions  during  and  after  civil  wars.  A  sizable  literature  has  sought  to  identify  the  specific  institutional  factors  that  matter  most  for  economic  growth—including  property  rights  (Acemoglu,  Simon  Johnson,  and  Robinson 2001), social capital and cohesion  (Stephen  Knack  and  Philip  Keefer  1997),  rational  bureaucracies,  and  work  ethics,  to  name a few—but which of these are affected  by civil war (not to mention how much and  under  what  circumstances)  remains  a  matter  of  speculation.  The  social  and  institutional  legacies  of  conflict  are  arguably  the  most  important  but  least  understood  of  all  war impacts. 58 Other potentially important topics awaiting systematic  empirical  analysis  include:  the  role  of  war-related  emigration  (especially  of  the  skilled)  on  later  economic  growth,  the  general  equilibrium  effects  of  death  and  emigration  on  labor  markets,  and  civil  war’s  effects  on  the prices of land, capital, and labor. Abbey Steele (2007)  includes a review of the determinants of population displacement, while Florence Kondylis (2008a, 2008b) presents quasi-experimental evidence on some of its economic  impacts.  To  the  extent  that  the  sudden  death  of  sizable  shares  of  the  working  age  adult  population  affects  relative  prices,  fertility  and  investment  decisions,  civil  war  could have impacts on living standards reminiscent of the  HIV/AIDS epidemic in sub-Saharan Africa along the lines  argued in Alwyn Young (2005). Blattman and Miguel: Civil War The historical evidence (described above)  that war enables the development of capable  government  institutions  in  Europe  may  not  generalize  to  civil  war  cases.  In  the  three  countries  that  experienced  U.S.  bombing,  the  wars  were  fought  against  (largely)  foreign  armies,  and  hence  could  rally  citizens  and renew government motivation and legitimacy.  In  civil  war,  government  may  lose  legitimacy,  while  victors  and  vanquished  (and victims) are condemned to coexist in the  same society, potentially exacerbating political and social divisions. Yet even the waging of internal war need  not always be uniformly destructive to institutions.  The  effort  to  control  the  nation’s  peripheries,  and  the  extension  of  national  control  down  to  the  community  level  are  essential  state  responsibilities.  Successful  states  do  so  through  a  variety  of  means,  including  the  use  of  force  (Tilly  1982;  Max  Weber  1965).  Hence  internal  warfare  could  hypothetically  generate  state-building  rather  than  institutional  disintegration.  Yoweri  Museveni’s  violent  takeover  of  the  Ugandan  state,  for  instance,  hinged  in  part  on  his  ability  to  organize  citizen  councils from the village up to the national  level—councils  that  became  the  basis  for  postwar  administration  and  (especially  by  regional standards) a relatively strong state  (Weinstein 2005a) Indeed,  there  is  some  cross-country  evidence  that  wars  that  end  in  outright  military  victory  for  one  fighting  side  lead  to  a  more  stable  peace  and  possibly  stronger  state  institutions  (Fortna  2004b;  Monica  Duffy  Toft  2008),  although  once  again  the  omitted  variables  correlated  with  outright  military  victories  make  interpretation  of  this  pattern  difficult.  A  draw,  a  negotiated  agreement,  or  a  ceasefire  is,  by  this  logic,  an  unstable  equilibrium  bound  to  unravel.  This  belief  has  led  some  scholars  to  argue  that  the  international  community  should  “give war a chance” (Herbst 2000; Edward  43 N.  Luttwak  1999).  In  an  indication  of  how  unsettled the literature currently is, another  recent  case  study  and  statistical  analysis  indicates that aggressive peacekeeping leads  to more lasting peace (Fortna 2008; Human  Security  Report  Project  2008;  Sambanis  2007).  Easterly  (2008)  argues  against  this  view,  however,  pointing  out  that  there  are  as many examples of failed foreign interventions (e.g., Darfur, Democratic Republic of  Congo, Somalia) as successes (Sierra Leone). One reason why research has produced few  definitive answers so far may be that there is  no simple, general relationship between civil  war  and  institutions;  impacts  may  depend  on why a war started in the first place, how  it  is  fought,  and how  it  ends.59  The  unpacking of these complex relationships is perhaps  the  most  pressing  area  for  future  empirical  research in this area. While the war termination literature tends to focus on the durability of peace agreements, a useful next step is  to  focus  on  patterns  of  institutional  change  during  and  postconflict.  While  the  analysis  of  these  relationships  is  clearly  full  of  omitted  variable  bias  concerns,  the  search  for  innovative research designs should continue.  Beber  (2008),  for  instance,  uses  the  higher  likelihood of mediated bargaining occurring  during  the  summer  months  (when  foreign  politicians and diplomats are freer to broker  deals)  to  identify  the  gains  to  mediation  in  interstate conflicts. A final perspective on the institutional and  social impacts of war comes from an empirical  literature on  postwar political  participation  and  accountability.  Of  the  preliminary  data available, some of the results are quite  counterintuitive,  especially  an  apparent  causal  link  between  war  violence  and  productive citizenship postwar. A recent microstudy  finds  that  war  victimization  increases  later  individual  political  mobilization  and  59  The  literature  on  war  termination  in  particular  is  vast, and is outside the scope of this review. 44 Journal of Economic Literature, Vol. XLVIII (March 2010) participation  in  local  collective  action  in  Sierra  Leone,  which  the  authors  interpret  as  a  result  of  the  psychological  legacies  of  individual  violence  exposure  (Bellows  and  Miguel  2006,  2009).  Former  combatants  in  Uganda  were  also  more  likely  to  vote  and  become  local  leaders  (Blattman  2009).  Likewise, psychologists find that the victims  of  violence  are  in  general  resilient  (Ann  S.  Masten 2001), and that exposure has even led  to  greater  political  activism  among  groups  such as Jewish Holocaust survivors (Devora  Carmil  and  Shlomo  Breznitz  1991)  and  Palestinian  victims  of  bombardment  (RaijaLeena Punamäki, Samir Qouta, and Eyad El  Sarraj 1997). Together, these   ndings begin  fi to challenge the notion that the motivations,  institutions,  and  social  norms  that  promote  local  level  collective  action  are  necessarily  harmed by civil war.60  4.4  Remaining Challenges Viewed  through  the  lens  of  economic  growth models, the existing empirical literature on civil war impacts still looks spotty.  Macroeconomic  studies  indicate  that  the  short-run  output  effects  of  armed  conflict  can  be  large,  but  more  work  is  needed  to  examine  the  underlying  effects  on  factors  of production and relative prices. The early  signs  suggest  that  population  and  physical  capital can fully recover after war, perhaps  as  quickly  as  within  two  decades.  That  recovery, however, appears to be contingent  on  the  preservation,  or  even  the  improvement,  of  political  stability  and  institutions,  as  was  the  case  in  Japan,  Germany,  and  Vietnam. Yet what the key institutions are,  and  which  domestic  policies  and  external  60  Yet findings are far from uniform. Miguel, Sebastian  M.  Saiegh,  and  Satyanath  (2008)  argue  that  civil  wars  may shape national socio-cultural norms toward violence.  They find that European soccer league players from countries with histories of civil war commit significantly more  violent  yellow  and  red  card  fouls  (conditional  on  player  characteristics). interventions  can  help  maintain  their  stability,  are  still  poorly  understood.  Even  theoretically  compelling  patterns  could  be  spurious, driven by omitted variables rather  than causal impacts. The microeconomic literature is even less  systematic at present, although in our view it  holds great promise. Many factors appear to  be adversely affected by civil war in at least  some cases. Those who participate in wars, or  simply live through them, often suffer from  persistent  injuries,  lose  out  on  education,  and  see  a  permanent  decline  in  their  productivity  and  earnings.  But  understanding  which  impacts  are  more  profound  and  persistent than others; which disproportionately  strike the poor; and how those effects can be  c   ontained by local institutions and economic  policies is still largely unexplored. Without  firm  answers  to  these  questions,  policymakers  and  foreign  aid  donors  have  often  taken  a  scattershot  approach  to  postwar  programs.  The  subject  of  post-conflict  recovery policy is vast and is largely outside  the scope of this review, but most of that literature  comes in the  form  of  best practices  summaries,  case  studies,  and  other  literature produced by international aid organizations,  governments,  and  NGOs.  Academic  research remains limited, and where it exists,  tends  to  focus  on  high-level  analysis  (e.g.,  the  relationship  between  aggregate  foreign  aid  and  national  economic  growth)  and  so  is largely unhelpful to those seeking specific  programmatic  solutions.  Given  the  many  possible  omitted  variables  involved  in  the  timing  of  foreign  interventions,  related  to  both domestic and international political factors, establishing the causal impact of armed  intervention  on  long-run  political  and  economic outcomes has been elusive. An obvious answer is to call for more data  collection,  continued  searching  for  natural  experiments or actual field experiments, and  more rigorous impact evaluations of postconflict programs. Judging by the rise of research  Blattman and Miguel: Civil War organizations like the Households in Conflict  Network  (HiCN),  increased  funding  by  the  World Bank’s Development Research Group,  and the growing literature, this call for more  and better analysis is already beginning to be  answered. 5.  Discussion and Future Directions Armed  conflict  is  finally  moving  into  the  research  mainstream  in  development  economics.  This  article  has  attempted  to  survey  this  flourishing  interdisciplinary  field,  describe its more robust findings, and point  the  way  forward  in  a  way  that  is  useful  for  both those new to the field as well as those  already actively working within it. Some  of  the  core  insights  are  worth  restating here. First, there has been considerable progress in the formal modeling of the  political  economy  of  civil  war  during  the  past two decades, with insights on the individual  decisions,  institutional  features,  and  economic  conditions  that  promote  violent  conflict.  Commitment  problems—either  across the two sides to a  conflict, or  among  factions within a fighting side—are currently  viewed as the leading rationalist theoretical  explanation for civil war, especially for longduration  civil  wars,  although  certain  types  of  information  asymmetries  may  also  play  a  role.  Disentangling  the  relative  contributions  of  the  various  commitment  problems  and  information  asymmetries  proposed  in  the theoretical literature is a top priority for  empirical  research.  Developing  new  explanations—possibly  challenging  the  current  modeling  assumptions  of  unitary  armed  groups, or even rationality—is also likely to  be fruitful. Second,  a  variety  of  theoretical  models  predict  that  low  incomes,  weak  state  institutions,  and  social  divisions  may  contribute  to  the  onset  of  civil  wars,  and  these  issues  have been the focus of most empirical treatments. The most robust empirical finding in  45 the existing literature is that economic conditions—both  low  income  levels  and  slow  growth  rates—contribute  to  the  outbreak  of  civil  wars  and  conflicts  in  less  developed  countries. This finding has found support at  both the cross-country and the micro levels,  although  the  correct  interpretation  of  these  patterns  in  terms  of  underlying  theoretical  mechanisms  remains  contested.  A  smaller  literature suggests that economic factors are  decisive in driving individual participation in  armed groups. However, the theoretical and  empirical  conflict  literatures  have  too  often  run  along  parallel  paths,  informing  each  other,  yes,  but  seldom  directly  intersecting;  greater  efforts  need  to  be  made  to  identify  and test the precise empirical implications of  the leading theoretical frameworks. In  contrast,  the  empirical  evidence  that  social  divisions,  political  grievances,  and  resource  abundance  are  drivers  of  violence  remains  weaker  and  more  controversial.  The  existing  literature  tends  to  measure  non-material  factors  crudely,  and  empirical  tests  rarely  attempt  to  capture  the  nuances  of  a  social  phenomenon  as  complex  as  civil  war, making it impossible to decisively reject  that  nonmaterial  factors  are  playing  some  role.  Further  research  using  better  data  is  needed to firmly settle the question of what  role political grievances play in driving civil  conflicts. There is also an emerging literature on the  economic  legacies  of  war.  At  this  point  the  macro literature and newer micro literature  have produced somewhat contradictory findings, although they can potentially be reconciled by appealing to the divergent outcomes  they  consider.  The  macro  literature  focuses  on  physical  capital,  economic  growth,  and  population,  while  the  micro  literature  mainly  on  human  capital.  Recall  that  standard economic growth models, including the  Barro  and  Sala-i-Martin  (2003)  framework  described in section 4, predict that the loss of  human capital will have more lasting adverse  46 Journal of Economic Literature, Vol. XLVIII (March 2010) economic  growth  consequences  than  the  destruction of physical capital. Future work  must  clarify  how  the  nature  of  the    onflict  c (internal versus international) as well as the  political,  social,  and  institutional  context  affects  long-run  economic  growth,  and  just  as importantly, must more seriously address  the many omitted variables that could simultaneously  drive  the  outbreak  of  wars  and  affect postwar economic recovery. The neoclassical  economic  growth  framework  usefully  highlights  the  most  important  gap  in  our  knowledge:  the  impacts  of  internal  war  on institutions, technology, social norms and  culture. Progress on these issues is critical for  crafting  appropriate  postwar  recovery  policies,  a  major  economic  policy  issue  in  conflict-prone  regions,  including    ub-Saharan  s Africa. Throughout  this  discussion,  a  key  lesson  that  emerges  is  the  important  role  that  new  data sources have played in enabling research  progress.  The  development  of  the  PRIO/ UCDP  civil  conflict  database  has  propelled  the cross-country conflict literature forward.  Disaggregated data on U.S. bombing patterns  allowed Davis and Weinstein (2002) to carry  out their seminal study on Japan. The increasing  number  of  longitudinal  household-level  datasets  in  less  developed  countries  have  made the new micro studies on war impacts  possible.  Some  of  this  data  collection  has  required  remarkable  ingenuity  and  courage  on the part of the investigators, notably, the  collection of data on civilians and combatants  from ongoing or recently concluded wars. Yet much more work remains to be done. In  our view, a major goal of civil war researchers  within both economics and political science  in the coming years should be the collection  of new data, especially extended panel microdata sets of economic conditions and opportunities. Ideally, these efforts would also be  coordinated,  publicly  shared  and  comparable, in a similar fashion, say, to the World  Bank’s Living Standards Measurement Study  (LSMS)  or  the  Demographic  and  Health  Surveys (DHS) program.61 Data  collection  is  of  course  inherently  difficult  in  “hot”  conflict  zones.  But  even  in  many  postconflict  settings  where  conditions  are  closer  to  normal,  statistical  agencies simply return to the status quo of survey  instruments, and fail to valuably collect retrospective conflict experience data. To illustrate  from  the  authors’  own  experiences  in  Liberia,  Sierra  Leone,  and  Uganda,  neither  the  government  statistical  agencies  nor  the  international  donors  financing  reconstruction there had plans to systematically include  questions  on  war  experiences,  victimization,  or  participation  in  the  national  census  or  other  representative  household  surveys  conducted  at  conflict’s  end.  Where  national  surveys of war experiences were conducted,  they tended to focus  exclusively on combatants. Closer cooperation among government  data  collection  agencies,  development  organizations,  and  researchers  will  be  required  for  the  systematic  and  comparable  data  needed to make further progress. A  few  specific  data  collection  directions  appear  particularly  promising.  First,  more  detailed  information  on  rebel  organization  and  decision  making  would  be  useful.  Some  civil conflicts, like those in Congo and Sudan,  feature a dozen or more active armed groups.  Pooling data from several such settings could  allow for a relatively large sample analysis of  armed groups—or “cross-rebel regressions”— establishing  patterns  useful  to  applied  theorists  working  on  rebel  organizations.  While  the  proliferating  number  of  surveys  of  excombatants  (described  earlier)  will  improve  such analysis, so far these datasets have been  selective: most focus on non-state actors and  61  For  LSMS,  see  http://go.worldbank.org/IPLXWM CNJ0. For DHS, http://www.measuredhs.com. The institutional  basis  for  such  coordination  may  already  exist  in  the  Households  in  Conflict  Network  (http://www.hicn. org). Blattman and Miguel: Civil War nearly all on Africa. The risk is that our understanding of civil war will be driven by a subset  of conflicts rather than a more globally representative sample. New data from Afghanistan,  Colombia,  Indonesia,  Iraq,  and  Nepal  (discussed above) is starting to fillin the gaps. Second, and perhaps easiest to collect, are  follow-up household surveys in post-conflict  settings  integrating  retrospective  information  on  a  wide  range  of  economic  behaviors  and  experiences  during  the  war,  along  the  lines  of  the  data  work  in  Bundervoet,  Verwimp,  and  Akresh  (2009)  in  Burundi,  Bellows  and  Miguel  (2006,  2009)  in  Sierra  Leone,  Blattman  and  Annan  (forthcoming)  in  Uganda,  and  Verwimp  (2005)  in  Rwanda. The Burundi and Rwanda surveys  deserve  special  mention.  In  both  cases  the  authors  identified  a  prewar  national  household  survey,  located  the  original  (archived)  surveys, and tracked down the sample households  again  after  the  war.  Such  intellectual  entrepreneurship  should  be  expanded  and  rewarded in the profession. Third,  we  need  to  improve  measures  of  political  attitudes  and  grievances  and  test  their association with actual behaviors. One  example  stands  out.  James  Habyarimana  et  al. (2007; forthcoming) identify theoretically  distinct  mechanisms  that  link  ethnic  diversity  to  trust,  cooperation  and  public  goods  provision, and then run experimental games  to compare the explanatory power of the distinct mechanisms in a representative sample  of  300  subjects  from  a  Kampala,  Uganda,  slum  neighborhood.  Experimental  economics  lab  research  in  other  developing  countries,  especially  in  conflict  and  postconflict  societies,  could  shed  light  on  the  individual  decision  to  participate  in  violence  or  on  the  resolution  of  collective  action  problems  within armed groups. Fourth,  at  the  macro  level,  we  encourage  the  development  and  synthesis  of  data  on  additional  forms  of  political  instability  and  violence.  Political  repression  figures  47 p   rominently in theories of conflict and cooperation (e.g., Acemoglu and Robinson 2006;  Besley  and  Persson  2009,  forthcoming),  and yet we have a limited sense of its use or  effectiveness. As noted above, the distinction  between civil war and these other phenomena  has  been  asserted  rather  than  demonstrated.  If  we  are  interested  in  the  struggle  between groups for national power, it is not  obvious  that  we  should  ignore  coups;  communal violence could similarly shed light on  participation in violent collective action.62 Civil  wars  and  conflicts  arguably  inflict  more  suffering on humanity than any  other  social  phenomenon.  Now  they  are  emerging  as  central  to  many  countries’  political  evolution  and  possibly  as  key  impediments  to global development. We hope this article  will promote the incorporation of these topics into graduate and undergraduate courses  in both economics and political science, and  stimulate further research. As we’ve discovered,  and  to  recast  Lucas’s  famous  phrase,  once  you  start  thinking  about  civil  war,  it’s  hard to think about anything else. 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