NCPA - National Center for Policy Analysis

The Economics Of Civil Wars

June 12, 2000

Economists at Oxford University have completed a study of the economics surrounding civil wars and come to some startling conclusions -- based on a statistical analysis of 152 countries in the 30-year period from 1965 to 1995.

Here are some of their findings:

  • Countries dependent on the export of primary, or unprocessed, commodities such as minerals, coffee and natural resources are more prone to civil wars -- in large part because such commodities and resources are rooted to a spot and can't move, making them available for rebels to loot, thereby allowing them to meet their payrolls.
  • In fact, a country where such exports account for 28 percent of gross domestic product has four times the risk of a civil war as does a country with no such exports.
  • Countries that are more ethnically diverse are less likely to experience civil wars, because the economic costs of pushing a highly diverse populace into conflict are much greater than when the nation is divided into just two or three groups.
  • Once a civil war has ended, the chances that it will resume go up by a factor of six if there is a large and relatively wealthy population of natives living outside the country, because such people have the money to fund rebel actions and can be sold on the idea of war.

The researchers suggest that it is greed and not grievances -- such as ethnic conflicts or political ideologies -- that lies at the heart of many violent conflicts that divide countries.

For example, resources of diamonds in Sierra Leone and Angola have been associated with rebel activities in those nations. In Colombia, rebel factions run profitable narcotics and extortion businesses.

Source: G. Pascal Zachary, "Market Forces Add Ammunition to Civil Wars," Wall Street Journal, June 12, 2000.


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