The Handbook on the Political Economy of War
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The Handbook on the Political Economy of War

Edited by Christopher J. Coyne and Rachel L. Mathers

By defining political economy and war in the broadest sense, this unique Handbook brings together a wide range of interdisciplinary scholars from economics, political science, sociology, and policy studies to address a multitude of important topics. These include an analysis of why wars begin, how wars are waged, what happens after war has ceased, and the various alternatives to war. Other sections explore civil war and revolution, the arms trade, economic and political systems, and post-conflict reconstruction and nation building. Policymakers as well as academics and students of political science, economics, public policy and sociology will find this volume to be an engaging and enlightening read.
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Chapter 10: Economic Perspectives on Civil Wars

Nathan Fiala and Stergios Skaperdas


Nathan Fiala and Stergios Skaperdas 10.1 INTRODUCTION Since the end of World War II, civil wars have taken place in over 70 countries, resulting in millions of human deaths and high economic costs.1 In the Democratic Republic of the Congo (formerly Zaire) alone, more than four million human beings have perished and many others have been displaced or completely impoverished since 1998 (Prunier 2009).2 The countries that have experienced civil wars are poor and there is a high correlation between per capita income and the incidence of civil war (see, for example, Collier et. al. 2003, p. 55). Even though traditional growth theory and development economics do not take into account the economic effects of civil wars, it would be hard to argue that countries involved in civil wars are not harmed economically. Moreover, low levels of per-capita income and economic shocks can feed back into inducing civil wars (see Miguel, Satyanath and Sergenti 2004). Thus, civil wars have high costs that cannot but impair economic performance whereas bad economic performance and lower levels of income increase the risk of civil war. We review some of the costs of civil wars, following Skaperdas (2009), in Section 10.1 of this chapter. Direct costs include destroyed public infrastructure, factories, machinery, housing and other physical property; deaths, physical and mental injuries and the future costs of caring from those who become disabled; and the extra costs of arming and lost equipment. Indirect or induced costs of civil wars include population displacement; reduced...

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