Trading Away from Conflict : Using Trade to Increase Resilience in Fragile States
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Washington, DC: World Bank
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While economic growth in developing
countries over the last ten years has lifted more people out
of poverty than in any previous time, more than one billion
people still live in countries affected by violent conflict.
Conflict weakens governance, undermines economic development
and threatens both national and regional stability. Trade
shocks, in particular, can have widely varying impacts on
conflict. This report sets out to empirically test these
linkages between trade shocks and conflict via cross-country
and intra-country analysis. On the basis of the analysis, it
offers trade-related policy directions to reduce this risk
in fragile economies. The results provide convincing
evidence that trade and trade policy have a large impact on
the risk and intensity of conflict. This report is composed
of three main chapters. Chapter 1 develops a conceptual
framework mapping the different channels through which trade
may affect conflict and political stability. The framework
is based on simple economic theory and the available
empirical evidence on the impact of trade related changes on
conflict and stability. It then tests this framework
empirically through the analysis of cross-country data and
through case studies of Nigeria and the Israeli-Palestinian
conflict. The hope is that these types of intra-country
analyses could be replicated in other countries, since they
use data that are available in different countries,
especially in sub-Saharan Africa. Chapter 2 uses the same
conceptual framework to show how differences in underlying
conditions affect the relationship between trade-related
changes and conflict. Following a review of the literature
on the drivers of conflict, it examines the importance of
four groups of grievances: conditions in neighboring
countries, factors increasing grievance, government
institutions, and policies that affect the transmission of
changes in international prices to the domestic market.
These relationships are tested using cross-country data and
case studies of Nigeria and the Israeli-Palestinian
conflict. Finally, chapter 3 uses the existing evidence, as
well as evidence generated in this report, to discuss how
the policies governing trade can reduce the probability and
intensity of conflicts. Two appendixes include detailed
information on the modeling framework, the data issues and
the estimation results.
Palabras clave
ACCESS TO FOREIGN MARKETS, AGRICULTURAL COMMODITIES, AGRICULTURAL PRICES, AGRICULTURAL PRODUCTS, AGRICULTURE, ARMED CONFLICT, BALANCE OF POWER, BANK ACCOUNT, BARRIERS TO TRADE, BATTLE, BILATERAL TRADE, BOUNDARIES, CHANGES IN TRADE, CIVIL WAR, COFFEE PRICES, COMMERCE, COMMERCIAL POLICY, COMMODITIES, COMMODITY, COMMODITY EXPORT, COMMODITY EXPORTS, COMMODITY PRICE, COMMODITY PRICES, COMPETITIVENESS, CONCESSIONS, CONFLICT, CONFLICTS, CONNECTIVITY, CONSUMERS, COTTON PRICES, COUNTRY DUMMY, CRISES, DEATHS, DEMAND SHOCKS, DEPENDENCE, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT ASSISTANCE, DEVELOPMENT ECONOMICS, DIVIDEND, DIVIDEND PAYMENTS, DOLLAR VALUE, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, DOMESTIC PRODUCERS, DOMESTIC PRODUCTION, ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENTS, ECONOMIC DOWNTURNS, ECONOMIC GEOGRAPHY, ECONOMIC INEQUALITIES, ECONOMIC INEQUALITY, ECONOMIC POLICY, ECONOMIC RELATIONS, ECONOMIC RESOURCES, ECONOMIC THEORY, ECONOMICS LITERATURE, EMBASSY, EXOGENOUS SHOCKS, EXPENDITURE, EXPLOITATION, EXPORT DIVERSIFICATION, EXPORT GROWTH, EXPORT MARKETS, EXPORT PRICE, EXPORT PRICES, EXPORT SECTOR, EXTERNAL SHOCKS, EXTERNAL TRADE, FIGHTING, FINANCIAL SECTORS, FOOD PRICE, FOOD PRICES, FOOD SECURITY, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN INVESTMENT, FOREIGN MARKET, FOREIGN MARKETS, FOREIGN POLICY, FOREIGN SUPPLIERS, FUTURE RESEARCH, GDP, GDP PER CAPITA, GENERAL EQUILIBRIUM MODEL, GROUPS OF COMMODITIES, IMPACT OF TRADE, IMPORT PRICES, INCOME, INCOME GROUP, INCOME LEVELS, INCOMES, INSTITUTIONAL CAPACITY, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL COMMUNITY, INTERNATIONAL DEVELOPMENT, INTERNATIONAL MARKETS, INTERNATIONAL ORGANIZATIONS, INTERNATIONAL PRICES, INTERNATIONAL STUDIES, LIBERALIZATION, LOW-INCOME COUNTRIES, MACROECONOMICS, MARGINAL EFFECTS, MARKET ACCESS, MEETING, MERCHANDISE, MERCHANDISE EXPORTS, NATIONAL ECONOMY, NET EXPORTERS, OIL PRICE, OIL PRICES, OIL REVENUES, OPPORTUNITY COST, PEACE, PER CAPITA INCOME, POLITICAL STABILITY, POLITICAL UNREST, POLITICAL VIOLENCE, PREFERENTIAL ACCESS, PRICE CHANGES, PRICE FLUCTUATIONS, PRICE INDEX, PRICE INDICES, PRICE LEVEL, PRICE SUBSIDIES, PRICE VOLATILITY, PUBLIC FUNDS, REAL INCOME, REBEL, REBELS, RECONSTRUCTION, REFUGEES, REGIONAL CONFLICTS, REGIONAL TRADE, REGIONAL TRADE AGREEMENTS, RULE OF LAW, SALES, SUSTAINABLE GROWTH, TAX, TAXATION, TECHNICAL ASSISTANCE, TERMS OF TRADE, TRADE AGREEMENT, TRADE AGREEMENTS, TRADE COMPETITIVENESS, TRADE FACILITATION, TRADE FLOWS, TRADE INTEGRATION, TRADE LIBERALIZATION, TRADE POLICIES, TRADE POLICY, TRADE PROTECTION, TRADE RELATIONS, TRADE SHOCKS, TRADE VARIABLES, TRANSPARENCY, TRANSPARENCY INITIATIVE, TRANSPARENCY INITIATIVES, UNEMPLOYMENT, UNEMPLOYMENT RATES, VALUE OF EXPORTS, VIOLENCE, VOLATILITY, VOLUME OF TRADE, WAGES, WARS, WEALTH, WORLD DEVELOPMENT, WORLD DEVELOPMENT INDICATORS