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Post-Conflict Recovery: Institutions, Aid, or Luck?
Author:
Mr. Antonio David
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Mr. Fabiano Rodrigues Rodrigues Bastos
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Marshall Mills
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https://orcid.org/0000-0003-4809-6446
Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 149
Language:
English
Publication Date:
01 Jun 2011
DOI:
https://doi.org/10.5089/9781455269471.001
ISBN:
9781455269471
ISSN:
1018-5941
Pages:
33
Keywords:
WP; terms of trade variable; executive constraints variable; conflict country; country policy; terms of trade volatility; economic growth; conflict; sub-Saharan Africa; terms of trade shock; terms of trade movement; Terms of trade; Real interest rates; Human capital; Estimation techniques
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper identifies the factors linked to cross-country differentials in growth performance in the aftermath of social conflict for 30 sub-Saharan African countries using panel data techniques. Our results show that changes in the terms of trade are the most important correlate of economic performance in post-conflict environments. This variable is typically associated with an increase in the marginal probability of positive economic performance by about 30 percent. Institutional quality emerges as the second most important factor. Foreign aid is shown to have very limited ability to explain differentials in growth performance, and other policy variables such as trade openness are not found to have a statistically significant effect. The results suggest that exogenous factors ("luck") are an important factor in post-conflict recovery. They also highlight the importance in post-conflict settings of policies to mitigate the macroeconomic impact of terms of trade volatility (including countercyclical macroeconomic policies and innovative financing instruments) and of policies to promote export diversification.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2011: Issue 149