Costs of Civil War and Fragile States in Africa

Abstract

This paper provides an analysis of the costs of conflict for the countries that are most affected by it, namely low‐income and fragile countries in Africa. It provides an analysis of the impact of conflict on economic growth using a panel of African countries and investigates the differences between those categorized as fragile and others. It finds that there are significant differences, with fragile countries most affected by conflict. It also considers the potential spillover effects of conflict and finds that fragile states also suffer more from conflicts within neighboring states. Finally, it considers whether the results are robust to endogeneity of the conflict variable. Using instrumental variable estimation confirms the negative effect of conflict and the larger effects on fragile states and gives even larger coefficient estimates.