Author Archives: Kritchasorn Jarupasin

Do Ethnic Divisions Matter for Civil Conflict?

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Over the second half of the 20th century, civil conflicts (i.e. intra-state conflict) have become increasingly dominant and now account for a greater share of deaths and hardship than any other form of conflict (the main comparator being inter-state conflict).  Empirical research shows that economic variables, particularly poverty and income inequality, are important determinants of civil conflict and there are a variety of channels through which they take effect.  For example, in poor countries young men choose to join the conflict because their expected income from fighting is greater than the income that they would obtain from the labor market, especially if natural resources are under dispute.  On the other hand, low national income leads to weaker repressive capabilities of the state, making it unable to control insurgencies.

Although the earlier empirical evidence often highlights the association between economic conditions and civil conflict, there is limited understanding of how armed groups form and cohere.  A promising starting point is the analysis of ethnic ties and divisions, which are popularly viewed as the leading sources of group cohesion and inter-group civil conflict.  The two broad approaches on ethnic divisions are “primordialist” and “instrumental”.  The primordialist view takes the position that ethnic differences are deeply cultural, biological or psychological, and irreconcilable. The instrumental view treats ethnicity as a strategic basis for coalitions that seek a larger share of economic or political power.  Under either of these approaches, ethnicity can facilitate communication and cooperation within the group but at the same time it increases tensions between groups through asymmetric information and commitment problems.  But why ethnic groups themselves form and cohere in order to engage in violence is still an open question.

Blattman, Christopher and Edward Miguel (2010) “Civil War”, Journal of Economic Literature, 48:1, 3–57. [Working paper version]

Collier, Paul, and Anke Hoeffler (2004) “Greed and Grievance in Civil War”, Oxford Economic Papers, 56:563-595. [Working paper version]

Esteban, Joan,  Laura Mayora, and Debraj Ray (2012) “Ethnicity and Conflict: Theory and Facts”, Science 336: 858-865.

Esteban, Joan, and Debraj Ray (2011) “Linking Conflict to Inequality and Polarization”, American Economic Review, 101 (4):1345–74. [Working paper version]

Fearon, James, and David D. Laitin  (2003) “Ethnicity, Insurgency, and Civil War.” American Political Science Review, 97 (March): 75–90. [Working paper version]

Horowitz, Donald L. (2001) Ethnic Groups in Conflict, University of California Press.

Miguel, Edward, Shanker Satyanath, and Ernest Sergenti (2004) “Economic Shocks and Civil Conflict:  An Instrumental Variables  Approach”,  Journal of Political Economy, 112(4):725-753. [Working paper version]

Welcome new members

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We would like to welcome the following new members of the InsTED network.

Prof. Matthew T. Cole (Florida International University) His research interests are in international trade and applied microeconomics with a current focus on strategic trade policy.

Prof. James Lake (Southern Methodist University) His research interests are in international trade, networks, game theory, and applied microeconometrics.

Welcome new members

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We would like to welcome the following new members of the InsTED network.

Prof. Arhan Ertan (New York University) His main research interests are economic development and international trade.

Prof. Eric Fisher (California Polytechnic State University) His publications include the fields of international economics, macroeconomics, applied economic theory, political science, physics, and experimental economics.

Prof. Fernando Leibovici (University of York) His research interests are international trade, international finance, and macroeconomics.

Prof. Antonio Navas (University of Sheffield) His research interests are international trade, and economic growth and development.

Prof. Dario Pozzoli (Copenhagen Business School) His research interests are in the field of empirical labour economics, in particular labour productivity, education, health and applied microeconometrics.

Prof. Ian Sheldon (Ohio State University) His primary research interests are in analyzing international trade and policy. 

Prof. Halis Murat Yildiz (Ryerson University) His research interests are in international trade, environmental economics, industrial organization, game theory, and public economics.

Thomas Zylkin (Drexel University) His specific interests include both the general equilibrium analysis of trade integration as well as the strategic nature of armed conflict.

Welcome new members

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We would like to welcome the following new members of the InsTED network.

Prof. Daniel Berkowitz (University of Pittsburgh) His researchs areas are New Institutional Economics, Development, Law and Finance, and Political Economy.

Prof. Johannes Boehm (Paris Institute of Political Studies) His research areas are Macroeconomics, International Trade, and Industrial Organization.

Claire Brunel (Georgetown University) Her research fields are Environmental Economics, International Trade, Empirical Microeconomics, and Development Economics.

Dr. David DeRemer (Hungarian Academy of Sciences) His specialization is in the fields of International Trade, Industrial Organization, Law and Economics, and Political Economy.

Prof. Robert Driskill (Vanderbilt University) His specializations are in Macroeconomics, International Trade, and Money.

Prof. Markus Eberhardt (University of Nottingham) His research focuses on the empirical aspects of economic development, technological change and growth. 

Political Economy of Agricultural Policy

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The 2008 world food price spikes lead to conflict between the World Bank and food exporters.  Motivated by the prospect of food shortages, food exporting countries responded to the food price spikes by restricting their exports just at the time when countries already experiencing a shortage were looking to the world market for relief.  In a bid to further encourage exports, food importing countries in some cases even responded by implicitly subsidising imports.  These interventions amplified the price spikes and harmed consumers in the intervening countries and beyond.  Seeing export restrictions as the root of the problem, the World Bank asked the countries concerned to desist from such practices.  But with violence erupting on the streets, some governments felt that their hands were tied to the export restrictive measures.  There is an active debate in the literature seeking to understand the policy responses that accompanied and exacerbated the food price spikes.

Over the longer term, supply side policies have depressed farmers’ incentives for some time.  The governments of many developing countries have taxed agriculture at significantly higher rates than other sectors or have taxed agriculture indirectly by overvaluing their currencies to pursue import-substitution industrialization strategies.  These policies clearly introduce price distortions.  It is an open questions as to whether these policies have a negative impact on growth and the income distribution.  If government interventions do have adverse effects, the question is why they are so prevalent in developing countries.  The political economy literature offers two main explanations.  One is that policymakers protect consumers in order to indirectly protect their positions in power.  The other is that governments are captured by vested interests in industry.

Anderson, Kym, Gordon Rausser, and Johan Swinnen (2013) “Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets.” Journal of Economic Literature, 51(2): 423-77. [Working paper version]

Findlay, Ronald, and Kevin H. O’Rourke (2007) “Power and Plenty: Trade, War, and the World Economy in the Second Millennium.” Princeton and Oxford: Princeton University Press.

Hillman, Arye L (1982) “Declining Industries and Political-Support Protectionist Motives.” American Economic Review,72 (5): 1180–87.

Krueger, Anne O., Maurice Schiff, and Alberto Valdes (1991) “The Political Economy of Agricultural Pricing Policy“, Volume 1: Latin America; Volume 2: Asia; and Volume 3: Africa and the Mediterranean. Baltimore and London: Johns Hopkins University Press.

Martin, Will and Kym Anderson (2011) “Export Restrictions and Price Insulation During Commodity Price Booms” American Journal of Agricultural Economics, 94 (2): 422-427. [Working paper version]

Schonhardt-Bailey, Cheryl (2006) “From the Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective” Cambridge and London: MIT Press.

Swinnen, Johan F. M. (1994) “A Positive Theory of Agricultural Protection.” American Journal of Agricultural Economics, 76 (1): 1–14

World Bank (2007) “World Development Report 2008: Agriculture for Development” Washington, DC :World Bank.

Welcome new member

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We would like to welcome the following new member of the InsTED network.

Dr.Ana Fernandes (University of Exeter).  Her research interests include work on how firms and workers are affected by globalisation. Her recent research examines global production relationships and firms’ decisions over whether to outsource to or integrate with foreign assembly plants in developing countries.

Natural Resources and Political Stability

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There is increasing interest in how natural resources influence political stability. Under a dictatorial regime, political stability is determined by the ability of a ruling group to stay in power. If political power is the route to personal riches by the appropriation of natural resource income, remaining in power is that much more attractive. As well as facilitating personal enrichment, a dictator can use part of the income from natural resources to suppress opposition through various mechanisms. These include direct repression and undermining the formation of rival groups (“divide and rule”). In democracies, incumbent politicians can use natural resources to finance popular projects in order to increase their chances of remaining in power via reelection.

On the other hand, natural resources can also be a source of political instability. They create an incentive for the opposition to take over power, yielding access to natural resource rents.  Another possibility is for the opposition to seize a natural resource and use it to fund rebel activity. In both cases the survival of the political incumbent is less likely in the presence of natural resources. These sources of instability tend to be pervasive in non-democratic regimes.

Acemoglu, D., J.A. Robinson, and T. Verdier (2004); “Kleptocracy And Divide And Rule: A Theory of Personal Rule”, Journal of the European Economic Association, 2 (2-3): 162-192. [Working paper version]

Alexeev, M., and R. Conrad (2009); “The Elusive Curse of Oil” Review of Economics and Statistics, 91(3): 586-598.

Andersen, J. J., and S. Aslaksen (2013); “Oil and Political Survival.” Journal of Development Economics, 100(1): 89-106. [Working paper version]

Arezki, R., and T. Gylfason, (2013); “Resource rents, democracy and corruption: evidence from Sub-Saharan Africa” Journal of African Economies,  ejs036. [Working paper version]

Bhattacharyya, S., and R. Hodler, (2010); “Natural Resources, Democracy and Corruption” European Economic Review, 54 (4): 608-621. [Working paper version]

Bjorvatn, K., and M. R. Farzanegan, (2014); “Resource Rents, Power, and Political Stability” CESIFO Working Paper No. 4727.

Collier, P., and A. Hoeffler, (2004); “Greed and Grievance in Civil War” Oxford Economic Papers, 56: 563-95. [Working paper version]

Frankel, J. A., (2010); “The Natural Resource Curse: A Survey”, NBER Working Paper No.15836. Cambridge, MA: National Bureau of Economic Research.

Gallego, M., and P. Pitchik, (2004); “An Economic Theory of Leadership Turnover.” Journal of Public Economics, 88 (12): 2361-2382.

Lipset, S.M., (1960); Political Man: The Social Bases of Politics. Anchor Books, New York.

Mahdavy, H., (1970); “The Patterns and Problems of Economic Development.” Published in in M. A. Cook, (ed.); Rentier States: The Case of Iran, Studies in the Economic History of the Middle East, Oxford University Press, London, pp. 428-67.

Robinson, J.A., and R. Torvik, (2005); “White Elephants.” Journal of Public Economics, 89 (2-3): 197-210. [Working paper version]

Robinson, J.A., and R. Torvik, (2008); “Endogenous Presidentialism.” NBER Working Paper No. 14603, Cambridge, MA: National Bureau of Economic Research.

Robinson, J.A., R. Torvik and T. Verdier, (2006); “Political Foundations of the Resource Curse.” Journal of Development Economics, 79 (2): 447-468.

Sachs, J.D., and A. M. Warner, (1995); “Natural Resource Abundance and Economic Growth.” NBER Working Paper No. 5398. Cambridge, MA: National Bureau of Economic Research.

The Interaction between Economic Institutions and International Trade

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The main focus of the recent literature on the economics of institutions has been on the role of institutions that define and enforce contracts and property rights in enhancing economic performance. A key finding of this literature is that countries with better rule of law and more private property rights protection have on average grown faster, where faster growth is associated with better allocative efficiency.  Yet a criticism of this literature is that there is a great deal of heterogeneity in institutions as well as in outcomes associated with a given institutional metric.

The literature on the interaction between economic institutions and international trade provides some insight into how such heterogeneity can arise. It does so by arguing that poor institutions can be a source of rent for some groups while institutions can also be a source of comparative advantage.  Consequently, the welfare consequences arising from the interaction between economic institutions and international trade are shown to be ambiguous.  For example, recent research shows that if (Ricardian) productivity is greater by a sufficiently large margin in the sector where the country has a comparative advantage, then comparative advantage is assured and opening to trade increases rent seeking, thereby reducing efficiency. But if productivity differences between countries are small then under trade they compete for the sector by improving institutional quality, and so trade liberalization increases efficiency.

Acemoglu, D., and J.A. Robinson, (2006); “Economic Origins of Dictatorship and Democracy.“, Cambridge University Press, New York, NY.

Costinot, A., (2009); “On the Origins of Comparative Advantage.” Journal of International Economics, 77: 255-264. [Working paper version]

Dal Bó, E. and P. Dal Bó (2011); “Workers, Warriors and Criminals: Social Conflict in General Equilibrium.” Journal of the European Economic Association, 9(4): 646–677. [Working paper version]

Engerman, S.L., and K.L. Sokoloff, (1997); “Factor Endowments, Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States.” Published in S. Harber (ed) How Latin America Fell Behind, Stanford University Press, Stanford. [Working paper version]

Garfinkel, M.R., S. Skaperdas, and C. Syropoulos, (2008); “Globalization and Domestic Conflict.” Journal of International Economics, 76(2): 296-308. [Working paper version]

Levchenko, A., (2007); “Institutional Quality and International Trade.” Review of Economic Studies, 74:3 (July 2007), 791-819. [Working paper version]

Levchenko, A.A., (2013); “International Trade and Institutional Change.” Journal of Law, Economics, and Organization, 29(5): 1145-1181. [Working paper version]

Nunn, N., (2007); “Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade.” Quarterly Journal of Economics, 122(2): 569-600.

Welcome new members

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We would like to welcome the following new members to the InsTED network from the University of Exeter Business School.

Dr. Surajeet Chakravarty His research interests include contract theory, allocation mechanisms and banking. 

Prof. John Maloney His research interests are in macroeconomics and history of economic thought.

Dr. Simone Meraglia His research interest is in political economy and economic history.

Dr. Christian Siegel His main research interests are in economic growth, structural transformation, and macroeconomic implications of household behaviour.

Dr. Jan Auerbach His current research interests lie in the intersection of Political Economy, Economic Development, and Growth.

Dr. Julian Neira  His currently work consists of two main lines on Public finance and Macroeconomics.

Dr. Rish Singhania His current research focuses on the valuation of mortgages and mortgage backed securities, valuation of assets under government guarantees, and properties of the aggregate production function.