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Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict : Evidence from Boko Haram (English)

Violent conflicts present a formidable threat to regional economies. Throughout the world, border regions in many countries are possibly impacted by the cross-border economic effects of regional insurgencies in neighboring countries or national state failures, i.e. "bad neighbors". This raises two questions. First, what is the magnitude of the spill-over economic effects of foreign conflict and what are the channels through which they operate? Second, what policies can governments adopt in the potentially exposed regions to mitigate such spill-over effects. In this paper, we adopt a difference-in-difference (DiD) framework leveraging the unexpected rise of the Boko Haram insurgency in Northeastern Nigeria in 2009 to study its economic effects in neighboring areas in Cameroon, Chad and Niger that were not directly targeted by Boko Haram activities. We find strong cross-border economic effects that are likely driven by reduced trade activities, not the diffusion of conflict. Factors of local economic resilience to this foreign conflict shock then include trade diversification and political and economic securitization. More generally, conflicts, if they have regional economic effects, may necessitate regional responses.

Details

  • Author

    Jedwab,Remi Camille, Blankespoor,Brian, Masaki,Takaki, Rodríguez-Castelán,Carlos

  • Document Date

    2021/11/12

  • Document Type

    Report

  • Report Number

    166003

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Western Africa,

  • Region

    Africa,

  • Disclosure Date

    2021/11/14

  • Disclosure Status

    Disclosed

  • Doc Name

    Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict : Evidence from Boko Haram

  • Keywords

    trade intensity; recording data; household survey data collection; light intensity; per capita income; intensive margin effect; Local Economic Development; number of refugees; negative income shock; high population growth; impact of policy; Conflict and Trade; rural economic development; rate of deforestation; community engagement program; mobility of people; loss of forest; wide dynamic range; regional economic activity; impact of transportation; Internally Displaced People; major trade route; influx of refugees; million people; impact of conflict; economic shock; agricultural burning; land expansion; Population Density; rural area; negative effect; fixed effect; refugee camp; local conflict; standard error; city population; land use; urban population; reduce trade; urban land; rural products; rainy season; border regions; housing supply; urban location; population level; terrorist group; oil refinery; urban resident; population increase; Rural Sector; positive shock; government intervention; land preparation; food price; anecdotal evidence; public expenditure; trade disruption; air force; Armed Conflict; military presence; international market; remote location; government army; urban agglomeration; satellite data; trade diversification; conflict countries; Conflict Prevention; Social Conflict; local resident; land area; human settlement; yield data; State Security; long-term effect; government property; data capture; food aid; natural vegetation; military intervention; property right; oil production; forest fire; climate shock; employment program; baseline analysis; Cash Transfer; commodity price; state capital; demographic growth; terrorist attack; spatial distribution; consumer price; trade shock; international commodity; causal effect; food crop; biomass burning; landlocked country; agricultural activity; soil fertility; trade restriction; atmospheric environment; dry season; land cover; spatial resolution; market access; border control; per household; border area; survey implementation; spatial patterns; panel data; digital archive; agricultural practice; empirical evidence; international demand; Civil War; migration flow; agricultural purpose; farming household; construction sector; individual incentive; net migration; terrorist activity; Population Change; price decrease; trade network; cross-sectional regression; Host Communities; regional impact; farming practice; potential trade; economic crisis; negative value; government consumption; Military Headquarter; Public Employment; population outcome; composite index; regional economy; national state; dynamic panel; construction technology; poverty trap; effect estimate; local income; administrative level; increase poverty; labor supply; housing price; negative correlation; take time; mitigation effect; natural experiment; trade sector; trade costs; social tension; geological survey; cross-border effects; global food; price shock; crop agriculture; oil industry; onshore oil; study including; real wage; labor condition; Rural Growth; land abandonment; rural counterpart; confidence interval; income decline; urban settlement; road closure; opportunity cost; trade volume; agricultural expansion; agricultural intensification; urban income; International Trade; agricultural product; secure location; capital-intensive industries

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Citation

Jedwab,Remi Camille Blankespoor,Brian Masaki,Takaki Rodríguez-Castelán,Carlos

Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict : Evidence from Boko Haram (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/168241636640474130/Technical-Paper-3-Estimating-the-Spillover-Economic-Effects-of-Foreign-Conflict-Evidence-from-Boko-Haram