A recent article on VoxEU discusses the link between poverty and violence in Africa. It’s a tricky topic because there are good arguments to be made for causation in both directions and the direction of causation matters hugely for aid policy.
Given the endogeneity in the data I was surprised to see that it took until 2004 for the first paper to be published that employed an instrumental variable approach to estimation of the relationship. Reassuringly, a number papers have been published since then. The authors of the Vox article use rainfall as their instrument, since it is highly correlated with poverty in Africa but uncorrelated with violence.
Using these econometric techniques they find that increased poverty leads to a large increase in the chances of violence erupting within a country. As a baseline they find that the average probability of conflict in a year when there is no change in GDP is 20%. From this, already high, baseline they find that a 5% decrease in GDP increases the chances of civil conflict in the next year to 30%. It appears that they use a linear model, so each 1% decrease in GDP leads to a 2% increase in the risk of conflict in the following year.
As a consequence, the authors recommend that African countries which experience drought or poverty in any particular year should be eligible for short term poverty relief. This is intended to reduce the likelihood of conflict ensuing from the drop in incomes.
It is particularly salient advice right now as the world sees commodity prices, upon which African countries often rely for their incomes, come down from their recent highs. Hopefully the international community listens to researchers and moves to help the commodity exporting nations in Africa before they start to feel the bite of the falling prices.
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